I was not very happy taking a loss yesterday. However, it is very important to obey the signals of the market in order to preserve ones capital and then make money when the markets offer up opportunities that fit your system to do so.
Yesterday I was long SNDK, in the morning on full margin in anticipation of a bounce. The bounce did not materialise. Instead SNDK and most leading stocks closed at or near the lows of the day. So as often do I exited the position for a loss. One of the things I have learned from experience is that when a new position I have initiated closes for a loss then most times my stop loss ends up getting triggered. There have been times when the stock reversed and move higher but these are few and far between the numerous others that continued to roll over to unimaginable depths.
This is along with the wide spread weakness in all sectors of the markets yesterday was what compelled me to exit SNDK although it had not yet invalidated the set up. So although in most instances one should adhere to the rules of their system sometimes gut feel based on years of experience over rules all else.
So I was rather happy this morning when I saw SNDK gapping down and I was safely sitting in cash.