Dealing with Getting Screwed in the Final Seconds of a Trade

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Dealing with Getting “Screwed” in the Final Seconds of a Trade

Most traders feel extremely “screwed” when in the final seconds of their trade they go from in-the-money to out-of-the-money. Seconds later, after the trade is expired (or stopped out)–and you lost money–the trade is right back in-the-money. In traditional markets this is equivalent to getting high-ticked or low-ticked, which is when a stop-loss is triggered right as the price is reversing back in your favor.

It is probably one of the most gut wrenching and frustrating feelings a new trader can have. “The world is against me!” “The market is manipulated!” “My broker screwed me!” These are but a few of the comments that may go through your mind. Your words will likely be more colorful though.

While extremely frustrating, there is no real way to avoid this. It happens to successful traders all the time.

Think of it in different terms. While you lost on the trade, your overall outlook was correct. Anything can happen at any given second in the market. All we can do is find an edge that works for most of those seconds. Occasionally though, a big buy or sell order will come in, just pushing the price out-of-the-money at expiry (or triggering a stop loss just before the reversal).

This is unavoidable. We can’t control the market. We need accept that this is part of it.

To Change or Not to Change

After a frustrating ordeal, the human tendency is to begin to change things. If overall you have been making money, and have a solid plan, don’t let a frustrating situation like this sway you or rattle your confidence. Stick to your plan. Accept that sometimes even when you are right, you won’t make money.

There is a random element to the market which can’t be studied or analyzed away. Losing trades happen. When you test out a trading system you may be right 6 or 7 times out of 10. Do that consistently and you can make a good income. Notice how the losing trades are already factored in? You can count on losing 3 or 4 trades out of 10….and you can still be profitable.

Why the loss occurred doesn’t matter. Don’t sweat it. As long as you follow your plan, expect that you will win about 6 or 7 trades out of 10 (varies by trader and strategy of course) and you will lose about 3 or 4 out of 10.

If your win rate is low, or you are losing money overall, then something does likely need to be done about your strategy.

First, address whether it is actually your strategy at fault or you. Sometimes a strategy works fine, but traders skip signals or don’t actually follow the plan precisely when trading. If this is the case, work on your metal game and build your disciple by relentlessly following your plan even when you think you shouldn’t.

If the strategy isn’t working, then consider how your entry and expiry times could be adjusted to produce more winning trades. If you entry points look good in hindsight, then it is choosing the expiry that needs work. But if your entry points are “in the middle of nowhere” and the price is zigzagging back and forth across it, then your entry points likely need to be fined tuned. Move the entry points to more significant price areas, based on indicators, trendlines, support, resistance or price patterns.

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All traders get that feeling of being screwed when a trade causes them to lose money at the last second. Unfortunately, that is part of trading. It happens; take some solace in the fact that you were almost right. Therefore, don’t start changing things just because of one frustrating situation. If you have a good strategy, stick to your plan. If you don’t have a good plan, do the hard work of making it better instead of blaming the market or your broker.

How to Not Get Ripped Off by Your Mechanic

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Even if it doesn’t come with 470 HP and Wi-Fi connectivity , your car is the biggest and most expensive gadget you own. And unless you trade your vehicle in as often as your MacBook, keeping that ride in peak operating condition is absolutely vital to keeping repair costs down over its lifespan.

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That’s not to say that every repair will be inexpensive—timing belts and heater cores, for example, are notoriously expensive to repair regardless of the make or model—but here are a few ways to make sure that $120 brake job doesn’t turn into a $1,800 leak in your checking account.

Ask Around

The most fundamental and essential element of not getting ripped off by your mechanic is to only do business with an honest shop. That sounds obvious, but it’s easier said than done. From shade-tree mechanics to nationally-branded repair centers and dealerships, many shops can be less-than-completely-ethical when it comes to billing for repairs and service. But to find an honest shop, you should first ask around.

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Survey your friends and family for suggestions, especially those that drive a similar make, model, or year of vehicle. Automotive repair businesses thrive on word-of-mouth advertising; it’s easily the biggest driver of new customer traffic for independent and local shops. That also makes it the most reliable method of narrowing down your search. It’s safe to assume that people won’t refer you to someone who screwed them over.

If you’ve just moved to a new town and don’t know anybody yet, check out Cartalk.com and RepairPal for free local referrals to quality shops. Avoid reviews from sites like Yelp, as they are written almost exclusively by disgruntled customers.

Think Independent

Independent shops should also get some added consideration over the big-box shops, because the business model dictates they build long-term relationships with their customers. Any shop that routinely overcharges customers risks damaging that relationship and could quickly find itself on the wrong end of negative reviews. An added benefit of this long-term customer service is that an independent shop will be better able to develop and maintain a full service history for the vehicle, which will help guide scheduled maintenance (and looks great when you want to resell it).

Evaluate the Shop

When checking out an unfamiliar mechanic’s shop for the first time look for the following:

  • A clean lot with plenty of turnover: Quality mechanics take pride in the appearance of their shops and rapidness of their repairs. If the shop’s lot is clean, the work floor tidy and bright, and there aren’t a bunch of half-repaired clunkers lined up out front, that’s good.
  • A knowledgeable Service Writer: The service writer is the guy that sits behind the shop’s front counter and produces the estimates and repair bills. He’s the one that you’ll be primarily interacting with while your car is in the shop and is responsible for answering the questions you have. If he’s reticent or not very helpful, that’s a huge red flag.
  • Talk to the mechanics: If possible, talk to the guys that will actually have their hands under the hood. Get a feel for their age and expertise. Some older mechanics will be whizzes at fixing classics but may not be as sharp when it comes to scanning the on-board diagnostics of this year’s 5-Series. Also ask about how long they’ve been with the shop. A high turnover rate is very, very bad. If the shop’s been there for more than a year but none of the mechanics have been there longer than six months, bail.

Don’t Get Pushed Around

There’s nothing a shop loves hearing more than “Do whatever’s necessary.” This is the goose that lays the golden crankshaft seal job, a licence to steal, and the four words that should never, ever exit your mouth in the presence of a mechanic. Instead, take control over what’s being done to your car—and how much you’re paying for it.

For each problem discovered with your car, have your shop generate a separate written estimate with the total cost of parts and labor—not parts and labor “plus fluids,” the total cost. So, for instance, an A/C recharge on a ’97 Ram 1500 may only be $75 parts and labor “plus refrigerant,” but the extra two pounds of R-134A at $2.75 an ounce will run you an unforeseen $44. A thermostat replacement on a late model BMW is expensive enough with the $65 OEM thermo and a half hour of $120/hour labor, but could wind up costing another unexpected $35-50 when the mechanic tops off your fluids with BMW’s uber-expensive, proprietary coolant blend.

Don’t let them suddenly tack on more work than you came in for, either. Several states have consumer protection laws requires that a written, itemized estimate be issued to and signed by the customer for any service or repair beyond what was authorized when it was dropped off before that work can commence. Whether or not your state is one of them, get one. Don’t sign it until you understand exactly what is being done and, more importantly, why. Have the service writer explain how the repairs he’s suggesting will alleviate the symptoms you’ve brought it in with. The final bill will likely vary slightly from the number you were quoted, but it should never be more than 10 percent higher than what you were told.

If the shop is suggesting scheduled maintenance, which occurs at specific mileage and chronological increments as the car ages, check the scheduled maintenance services outlined your owner’s manual against the itemized list you (should have) gotten from the shop. If the two don’t match up, ask why. Scheduled maintenance is set by the manufacturer for each make and model and generally shouldn’t be deviated from unless there’s a good reason (i.e., there’s no need to check a car’s rotors at the 30,000 miles service if you’d brought it in the previous month four wheel brake job; the inspection would have been completed then.)

Keep Your Receipts

If you’ve been jumping around from mechanic to mechanic for a while, you’ll do well to keep all of your service records and receipts—preferably in a waterproof envelope in your trunk. Seriously. Since you don’t have a single shop tracking your vehicle’s service history for you, you’ll have to do it yourself. It is worth it.

By maintaining a solid service history, you’ll be able to check these records when a new mechanic tells you that, say, your steering is shot while replacing a couple of brake lights and verify that a pair of tie rods were replaced recently. This doesn’t imply that the new shop is run by crooks, mind you—the last shop could have bungled the installation, the replacement parts themselves could have been defective, or you could just drive like an ass and go through steering joints every half year—but even knowing that it was done will prevent you from blindly shelling out cash for unnecessary repairs.

On a related note, if something does go wrong with a recently replaced part, know your shop’s warranty policy. Know how long and how many miles it lasts. Some shops will warranty a part for more than a year or 10,000 miles, others will offer brake-light warranties (the warranty ends when they can no longer see your car’s brake lights). Also make sure you know if warranty repairs cover just the cost of the replacement part or if they include the associated labor as well.

Do Your Homework

It’s tempting for unscrupulous shops to swindle uneducated customers because it’s really, ludicrously, painfully easy. If a shop calls you up and says that the CEL is bouncing back a “code G7: inoperable bailiff, reading out of range” and that you need a $1500 TCP/IP sensor and fluid flush to fix it—and you pay for it—you deserve to get ripped off. Ask them to explain what any confusing words mean in a way that non-mechanics can understand. Don’t get off the phone or sign any work order until you have a good grasp of what exactly being done to your car in plain English. Even then, tell the shop you’ll think it over and get right back to them. Then, get a second opinion.

Call a couple of other reputable shops in the area and request a quick estimate for the same job. It doesn’t need to be written but should discern part costs from labor. If your shop’s price is significantly (25 percent or more) higher than what’s being quoted, take that price to your mechanic and ask what’s going on.

What’s more, always request to see the broken parts when they’re removed and have the mechanic show you where and how they broke. This will facilitate a better understand of how the giant rolling gadget you’re driving actually works, and will help you keep it running smoothly for many more miles.

Dealing with Getting “Screwed” in the Final Seconds of a Trade

Other shady dealers will sweeten the deal by offering additional items like paint protection, extended warranties, or gap insurance while telling you not to worry your sphincter over it, because it’s all “included in your payment” — implying, of course, that you’re getting it for free (since it’s under the umbrella of what you’re already paying for). But wait, did you actually ask for that stuff? And if you say you don’t want it, shouldn’t your payment be lower? Yeah, what the dealer is pretending to throw in like the toy with your $30,000 Happy Meal is called payment packing, or “charging you for shit you didn’t agree to buy.” If you’re thinking to yourself that payment packing should be illegal, it actually is in some states, and as we all know, once a law is made, nobody ever, ever breaks it.

Spencer Platt/Getty Images News/Getty Images
“He’s trying to get him to sign off on rust-undercoating. Send them in.”

The point is, unless you’re getting the price minus those incentives and with the interest you will actually be charged over the life of the loan, you’re not getting the price — you’re getting an irrelevant string of digits. Which brings us to .

Hlib Shabashnyi/iStock/Getty Images

If you’ve ever bought a car from a dealership, you’ve almost certainly had the dealer sit you down and watch as he pulled out a piece of paper onto which he drew four squares. This is the beginning of the price negotiation phase, and you are about to see all of the salesperson’s mystical mind tricks on display.

Kevin Winter/Getty Images Entertainment/Getty Images
“Obi-Wan also never told you how he got tricked into buying a PT Cruiser with spinners.”

That thing he drew on the paper is the now-infamous four-square worksheet. The four boxes are for the price of the car, the monthly payment, the down payment, and the trade-in value of your old car. The salesman will bounce from square to square, scratching out and rewriting numbers to keep you from getting too focused on one block, if that block is starting to upset you. The numbers are all interconnected through moderately simple math, but if you don’t have a calculator in front of you (like the salesman does), it’s all just nonsense. So, your eye will be drawn to the one square with the most easily understood number: the monthly payment.

This is by design — the dealer knows that $25,000 is a much bigger and scarier number than $350 (a month, for five years). It also allows the salesman to put things into more abstract terms. If you’re haggling over $30 on the monthly payment, the salesman might pitch it to you by saying something like “$30 a month is only one bottle of Coke per day.” Why, that’s not much at all! I’m so sorry for having been such a miserly bastard. Please, accept my money as a token of my contrition.

Monkey Business Images/Stockbroker/Monkey
“Would you like a go at my husband as well?”

Wait a minute — if $30 a month is such a trifling amount of money, why isn’t he cutting it from the price? That’s because over five years, that “bottle of Coke per day” adds up to $1,800 (not including interest), and no dealer is going to let two grand fly out his door. So, for the second time, the advice is to focus on the actual, total price of the car.

After all, that’s what’s actually going to come out of your pocket; everything else is just trying to make it fit into your monthly budget without resorting to catching your food. You’re not renting the car, you’re buying it. It makes no sense to be OK with a higher price just because they stretched the payments out for longer, unless you think that before the term of the loan is up that society will collapse and all currency will become worthless in the post-apocalypse (if you do, spring for the four-wheel drive — I have several on the lot here . ).

TIM MCCAIG/iStock/Getty Images
Fools. In the gas-starved wasteland of the apocalypse, the hybrid owner is king.

If you’re pricing a new car, Edmunds.com is a godsend. On top of having reviews on essentially all the cars, they have another thing called the True Market Value tool. Remember that database I mentioned with all the final prices of every car a dealer sells? Edmunds has access to that, so if you enter your ZIP code and what car you’re looking for, it will spit out a bell curve of what you can expect to pay for it. And in addition to that, you can also find out every incentive, rebate, and financing offer that is being offered for each model so you can work out ahead of time which combination of incentives works best for you.

If you’re undecided about what car you want, you can still avoid visiting all the prospective dealers, since even if you do manage to walk away (remember, the entire point of these sales tactics is to ensure you don’t make it to the second dealer), test driving a car virtually guarantees a deluge of emails, phone calls, and everything else short of flaming bricks through your window, all trying to pull you back onto the lot. But since the test drive is one of the most important parts of buying a car, CarMax is a good alternative. Because they deal with used cars in large volume, you can test drive all the cars you’re considering in one trip, and since CarMax sales people aren’t paid on commission, you don’t have to worry about being pestered with Christmas cards and boiled rabbits later on.

Justin Sullivan/Getty Images News/Getty Images
“I’m not gonna be ignored.”

Once you are ready to dance with the car-devil in the pale moonlight, that’s still no reason for you to actually talk to a human being. Instead, start emailing dealerships and getting quotes on the car you want. Not only will you be less tempted to make an impulsive decision (that car does look pretty damn sexy up close . ), but it reverses the entire dynamic, because the dealer knows that you’re probably emailing multiple dealerships, so now the pressure is on them instead of you.

Our dealership offers special Internet pricing, because someone who is emailing us is less likely to need a car right away than someone who walks into the showroom. If you play your cards right, you should only have to step on the lot to sign the paperwork and pick up your car.

Creatas Images/Creatas/Getty Images
“I’ll be by at 3 to sign the agreement, and remember, no eye contact!

And for you, all of this means .

I mentioned earlier that payment packing had been made illegal in parts of the USA, and in general there is a trend of going away from the shady shit I described. The biggest reason for that is the Internet — the information available to consumers has leveled the playing field, like this amazing expose written for Edmunds by a reporter working undercover as a car salesman. Customers are too well-informed these days to be screwed over like they used to, so salespeople who are unable to adapt don’t survive. Also, in the wake of the economic collapse of 2007 (and the near-collapse of several automakers), cash-strapped customers were less willing than ever to put up with a salesperson’s shit.

Creatas/Creatas/Getty Images
“OK, he isn’t happy, but my manager says that he’s willing to take your firstborn off the price if you sign right now.”

So these days, a lot of dealers have moved away from the traditional profit-based commission structure and replaced it with a flat commission. Salespeople are paid a fixed amount for every car sold, regardless of how much profit the dealership makes, so they have no incentive to screw you on the price.

And, over time, the fast-talking, shady salesman types are being pushed off the sales floor. When I started working in 2002, the dealership was full of those people. Not long after, a new manager took over and fired every salesperson except me, because they saw which way the wind was blowing.

Visage/Stockbyte/Getty Images
“Always. Be. Closing. Doors. Everybody’s. Fired. Goodbye.”

Now that I run a dealership, I control what kind of salespeople work there. I always make interviewees read that Edmunds expose and tell me what they thought of it. If I get any hint of them condoning the sales methods, I show them the door. Many dealership managers (myself included) are very hesitant to hire salespeople who have worked at other dealers simply because we don’t want them infecting the staff with shady tactics and bad habits (you’ll notice how young most of the salespeople are now — this is why).

So, what happened to all of those sleazy salespeople? If you’ve bought a house or a bed recently, you already know — a lot of the old school salespeople moved on to real estate, and after the housing bubble, most now (curiously) work in flooring and mattress sales. Hey, have you heard that you need to replace your mattress every eight years because it fills with dead skin? Yes, there’s always a market for bullshit.

Creatas/Creatas/Getty Images
“Of course! Manure sales!”

“So,” you’re probably asking, “if that’s true, why can’t I just buy a car for a set price off the Internet, the way I buy every fucking other thing in my life?” Well .

Barry Austin Photography/Photodisc/Getty

A survey found that 90 percent of consumers would be more excited about buying a car if it was a haggle-free experience. This dovetails nicely with the desperately emerging trend of “no-haggle” car sales, which is exactly what it sounds like: the price of the car is set, there’s no negotiation, take it or leave it. So if customers hate haggling, and dealers know they hate it, why does it continue?

Well, it’s kind of a self-perpetuating thing — remember, the customers have been taught over the course of decades to assume that they’re getting screwed if they take the advertised price. So if the dealer says, “Let’s not haggle!” a large percentage of customers nod and say, “Ah, yes, it’s the infamous ‘no haggle’ haggling technique! Well played, sir!”

imtmphoto/iStock/Getty Images
“He tasks me . he tasks me, and I shall have him!”

This isn’t a hypothetical for me — I ran a no-haggle dealership for a while, and while the survey claims that 90 percent of customers want haggle-free buying, approximately 100 percent of customers insisted on freaking haggling. It wasn’t like the prices were so inflated that they felt forced into it — I marked all the cars below the Edmunds TMV and below what people were frequently paying at other dealerships. It didn’t matter — the dealership ultimately closed simply because customers could not accept at face value that I was offering them a good deal.

And some people just seem to like playing the game. Not long ago, I had a gentleman on the lot, and after several hours with him, we had negotiated a good price on a car. Just as were getting ready to close, he informed me that a competing dealership had quoted him the same car for less money. When I looked at the quote, I pointed out the aforementioned fine print that said “all incentives applied,” but he insisted that the other dealer had promised he could use both the cash-back bonus and the 0 percent interest. Even after I showed him that all dealerships were strictly forbidden from doing that, he decided to check out, but promised that if it turned out to be a scam, he would come back.

CREATISTA/iStock/Getty Images
“Fine, but you do so with your head hanging in shame!”

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