Time In Force: I Am the Worst Stock Trader Ever!

A few days ago I was inspired by Paula Pant from Afford Anything. She had a very eye opening and entertaining post called I am the Worst Negotiator Ever! where she battled a domain name squatter for her domain name. A must read. This reminded me of my bonehead stock order a few weeks back and I’m not talking about when I went on stock tilt. Let’s just say it hasn’t been a great month for yours truly in the stock market.

Early one Friday morning, in my haze of putting Baby Buck down, the recent volatility forced me to enter stop loss sell orders to protect my portfolio from too much down side risk. Earnings were coming around the corner and news wasn’t too rosy across the board. Even the untouchable stock darling Apple missed and got punished. My stock Coinstar (CSTR) was under pressure, but I sat calm like a cucumber because I knew my stop loss sell order would bail me out before I took in too much water. I nervously waited for earnings. The numbers were horrible and the after market action ripped the stock price to the downside.

“Wait a minute, why does my portfolio still show that I own it?!?!”

After a quick review, it looked like my stock stop loss sell price was never reached.

“Wait another minute, does that mean at tomorrow’s open I’m forced out with a mean haircut?”

I quickly realized stop loss sell orders work pretty well in most cases, but in this perfect storm, my stop loss sell order was useless! After more review, things got even worse. It turns out my stop loss sell price was hit a day earlier.

“What happened to my stop loss sell order? Did it disappear?!?!”

I quickly scanned pending orders. No orders listed.

“What on earth is going on here?!?!”

I contacted Fidelity tech support via chat and pleaded my case.

“I placed a stop loss sell order for CSTR, what happened?!?!”

They calmly responded that they needed some time to review my history. Soon after, the mystery was solved. My Time in Force was left on the default setting of Day which means the order expires that day if the stop loss price is not reached.

Time In Force

My intention was to select Good Till Cancelled which keeps the order alive for 120 days or until I cancel it. In my haze, I punched in my order, but forgot to change the Time in Force default value. No one is to blame except me for my carelessness.

Final Thoughts

I’m not going to spoil Paula’s story, but I really liked how she faced, owned, and had fun with a situation where many people would view as negative. As for my situation, I am taking this opportunity to face, own, and grow from my very careless mistake. Too many times in the past, the mistake was so painful I ignored it, denied it, and buried it. Not only did I take a financial hit, I robbed myself of the expensive lesson. This stunted my stock trading growth and I repeated the same mistakes. In fact, my trading would turn even more erratic and emotional because I was on stock tilt from the first transaction that I never got over. The viscous cycle would repeat itself time and time again, until now. Going forward, I will apply these steps if I run into a stock trading mistake or any mistake for that matter.

Take a step back and breathe
Quickly assess what went wrong
Recognize the mistake and don’t deny it
Own it, learn from it, and grow
Limit the negative feedback loop
Stay positive and forgive yourself
Talk about it, share it, and move on

How do you deal when you make a mistake?

Stay Inspired!
Buck

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12 Responses

  1. I had the same issue with another stock, can’t remember which, But it was good for me, my buy order was cancelled and the price went further down the next day, so I got it cheaper.

    P.S. time to remove the go banking rates banner now?

  2. That is a rough lesson to learn but I bet you never make that mistake again. Hopefully you didn’t have too much hinging on that one position. I think many people try to put bad situations out of their memories instead of learning from them and that is a shame because they likely will repeat their mistake.

  3. krantcents says:

    I take my hit and go on! I have my share of mistakes, but don’t dwell on them.

  4. Of course, been there, done that. Every investor has these types of stories. Long story short, both the professional portfolio I manage and our own portfolio are now predominantly invested diversified index funds and individual bonds and some peer to peer loans.

  5. Van Beek says:

    Nice and practical example of what you may encounter as an active trader/investor.

    My own trading and investing approach requires less hectic and fewer quick decision moments. That suits me better.

  6. Hey there!! I just saw this post. Sorry about your experience, but I love the story! I think of moments like these as “tuition.” You learn a lot … and it’s hopefully cheaper than a semester at college!

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