Lessons for an undisciplined trader

This recent foray of mine, to do some swing/momentum trading, is turning into a pain in the ass. As the cliche goes, you're only as good as your last trade. For me, that would be a major El Stinko!

Perhaps I was far too confident. Not cocky, but overly confident, so much so that the notion of a stop-loss order was hard to comprehend, let alone execute. It had been awhile since I'd picked a loser, but my methodology has applied to long-term holds in my favorite (A grade stocks). By delving into more stocks during earnings season, there's a lot less substance involved. Cases in point :

• China Digital TV wasn't an earnings play, but an IPO that captivated me. I entered this stock on Day 1 and Day 2 at 29 and 32. It promptly ran to 55 within a week, and I even got a few more share at 51 along the way. Inevitably, the stock sank once momentum ran dry. Instead of selling at 7% (or whatever number) from the top, I held all the way down to 39. I sold half of my shares yesterday, thinking I was wiser as a result. The result: With an average cost of 35, this was a mediocre win.

• VMware seemed as good a pick as any for such a young stock. Love the growth rates, the niche, the history being born out of EMC. As close to a lock as there is going into earnings. Result: My buy at 97 is profitable. VMW traded at 113 today. A clear win so far.

• Feeling good about my recent buys, I opted to enter Longtop Financial, but I was way too late. Because of work, I missed the final hour of LFT's amazing run at the end of Day 1. I got home to find that LFT was no longer at 25, 26 or even 27. The stock was at 32 and climbing in after hours. Instead of leaving it alone as I normally would with any runaway stock, I chased and bought at 33.70. Bad move. Today, the stock ran up in pre-market to 36, but sold off after the opening bell down to 28. I should have just sold at 34 and broke even at worst. Now I'm holding the bag. A freaking bagholder. The only silver lining out of this is that it's not a big position. I feel foolish nonetheless. Result: Down 10%, a definite loss so far.

• As if LFT wasn't bad enough, I also bought a few shares of Baidu at 337. A lock for blowout earnings, I felt. Here, as with China Digital TV, VMware and Longtop Financial, I was not buying based on the technicals of the chart. (If I had, with BIDU well above its moving averages, I would have stayed out.) So, Baidu announced OK earnings today, and the stock immediately plunges $20 in after-hours trading. It will be worse tomorrow. Baidu will eventually come back to 337, maybe tomorrow afternoon. Maybe next week. Maybe in December. Whatever the case, it's dead money for now and I am done doing the yo-yo thing with earnings.

• And then theres lululemon athletica, which has plunged from 60 to 51 in mere days. 60 was not sustainable, not without real news since the Co guided the street higher for Q3 earnings last week. It was just a couple of months ago when the stock was mired in the 30s. I entered this stock with a trade in mind, though I was (and still am) impressed with the company's potential. However, the rapid run-up should've had me on red alert. At 60, I should've established a stop-loss sell order for half of my position.

I'm not altogether mad about the slipapge in LULU. At 51, it is now below its 10-day SMA and EMA, and if I were out of this stock, I'd be real close to buying in here.

But more and more, I'm starting to think of everything outside my A+ and A stock picks as trade bait and only trade bait. I'm not 100% there yet, but the day is coming. I may have to embrace the volatility rather than rebuke it.