TBT - Big Mistake - Let's Analyze

Let's talk about TBT - the Ultrashort Treasuries ETF. Fundamentally, the idea that Treasuries would be sold down and be a long term winner makes sense. However, that type of analysis is not what I do and based on the trade results (of being short during a phenomenal long run by Treasuries) we need to take a closer look at what went wrong.

Mistake #1 - Entering a trade because you believe in a good idea. Usually you can get around this fact without any damage but see Mistake #s 2 and 3.

Mistake #2 - Entering a trade without a true plan.

Mistake #3 - Entering a trade without an exit strategy and a stop loss.

Mistake #4 - Letting a short term trade turn into a long term holding. Tell me that has not been painful for people nowadays.

At this moment, the position is down approximately 33%. This type of loss is more than triple the acceptable downside that is a key criteria in the trades that I take. The simple placing of a stop order around the $55 level - a level I thought had no prayer of being breached would have contained the loss to roughly 13%, but I got lazy and thought I was smarter than that.

What to do now:

Quite simply - we will hold the position and look to exit out on an upside bounce toward the $50 level. However, a new stop goes in at $42 to protect against any additional downside.

Live and learn.

It has been a while since any posts were made - let's catch up on the activity

PLXS - stopped out on 11/19 at $14
TIVO - stopped out on 11/19 at $5.75