I’ve never liked the taste of Humble Pie!

AKA, when I short AAPL pie, I need to prepare to eat HMBL pie

A number of readers have asked me to recap my recent trades in Apple Computer. Of course, I was a busy little beaver posting the details of my shorting campaign – mainly motivated by all the hate messages I received from my initial AAPL posting, then the post that laid out a trading strategy to risk 75 basis points (3/4 of 1%) to make 1420 basis points (14.2%).

I detailed my trading in AAPL during the course of six blog posts and 15 StockTwit posts. See the chart for the graphic representation of my trading. The sales are circled.

So, here is how my AAPL trade unfolded.

• Sold 100 shares on 4/8 at 338
• Sold 100 shares on 4/8 at 334.90
• Bot 100 shares on 4/12 at 332.02
• Sold 100 shares on 4/14 at 332.41
• Sold 100 shares on 4/18 at 322.87
• Bot 100 shares on 4/18 at 328.34
• Bot 100 shares on 4/18 at 331.81
• Bot 100 shares on 4/18 at 331.82

Bottom line:

1. I planned and executed a short play in AAPL
2. AAPL ended up springing a gigantic bear trap
3. I ended up shorting and covering 400 shares per $100,000 of capital
4. My net gain was 42 basis points (4/10th of 1%)
5. The bulls won out in the end (or so it seems as of today)

Lessons:

• The AAPL lovers appear to be right after all – congrats. A trader needs to be a good loser to be a good winner
• Trading is all about risk and trade management
• Without hesitation, I would do the short campaign all over again in any other market that displayed the same chart construction

###