Through the end of June, I was way up for the year.
The morning of July 3, though, took nearly all of that profit away.
One stock after another dropped 30% in a matter of minutes (look at charts for coal companies, for examples).
I sold everything that hit its no-excuses stop limit, and a good thing too because the crunch continued on the next trading day.
By the next week, I owned almost nothing and my profits were back to where they'd been in February.
Ouch.
It was my biggest draw-down to date.
It was most of a week before I felt like trading and nearly a week after that before I found any stock that I felt any confidence in going either long or short.
The charts for ANR, ACI, JRCC and other coal companies now resemble textbook examples of recoveries stymied by resistance, and maybe giving up price recovery after a while. Bear rally mood at best this quarter?
I definitely thank Tharp's book for teaching me the discipline to obey a no-excuses stop limit. That saved me a lot of capital that would have been lost if I'd thought I could ride through the dip.
And at least I'm still up for the year to date.
Rebuilding is now in progress, but it's a lot harder to find easy picks in July 2008 than it was for me in the first half.