$VTAE is up $10+ in the past few days, moved from $6 to a high of $17 today. However that shouldn't influence how one should approach to trade it. "It's up too much" isn't a strategy. The only strategy, is to wait for a good entry.
Unless you have been shorting on pops and covering into washes, you'd be underwater most of the trading day, and likely to have been spooked out by one of the pops (rather than being ready to short).
Additionally, you can clearly see that waiting for the "backside" and shorting on pops would have made a much more straightforward trade.
I made one good trade out the gate on it, and then started to build a position in the high 15s anticipating a 15.50 break and flush; since the entry was far from perfect, having not shorted on a pop, rather on a sideways movement, I was easily shaken out of my position when it broke 16.50, right before it melted $3 in the course of half an hour.
$ISR Trade Recap
$ISR made a move from 1.40s to 1.9, pulled back and failed to break and hold 1.90 again. Took a short position high 1.80s, with nhod risk, and was going to cover if 1.80s support held
Support seems to have held, so I covered for small gains
My stop for at least part of the position should be if a higher high is made, this way I'd be in the trade for a nice fade
$DGLY Trade Recap
Same concept, big run up, pullback and another push towards highs. I shorted 15.20s
Alas my covers were much higher, but still, nice snap
$RGLS Trade Recap
Shorted 15.60s with tight stop 15.80, target 15.40 then .30s
Covered some here
rest here
Credit goes to Nate aka @InvestorsLive for introducing me (via IU material) to this setup;
The setup:
Stock with a wide range, preferably up on the day, however I would not exclude a stock down on the day that has bounced a fair bit (a-la $NQ later in the day today)
Ideally a stock gapping up and running out the gate.
To be on the safe side and ensure the move is exhausted, instead of shorting into the initial spike, wait for it to pullback a little and make another attempt to run at hod. When you see that attempt failed (ie confirmed lower high, stock unable to reach new highs and started to trend down) you short, with a nhod being your risk (or if it doesn't make sense r/r wise, find your own risk).
This setup greatly reduced your risk to get squeeeeeeezed.
Take $CENT for example this am:
More experienced traders could profit from shorting into the pop and quickly covering into the quick wash, however for less experienced ones waiting for that "confirmation" that the bulk of the move, the scary part is over, should be preferable.
I have posted three trade recaps from today of me practicing this setup on $NQ $CNET and $ZAZA, find them under the "Trades" section on my website at
www.paraboltrades.com/trades.html
Similarly to previous two trades, big move, waited for a lower high. Shorted a few at high 3.30s with nhod risk
This time note after making a lower high it bounced back, and made another go at hod, stopping just short. I added at that point, again with nhod as risk; I covered in the low 3.20s.
It too then faded under $3 further suggesting that one should keep a few shares for the fade
$CNET made a big move out the gate, pulled back eventually and started to climb back up
Just before I tweeted:
And shorted thereafter with high 2.20s avg. I covered like the piker that I am in the mid to high 2.10s
$CNET kept fading the rest of the day
Lesson here is firstly - especially if you're still new to this, to NOT short on the way up, rather wait for a lower high. And always keep some shares in case it keeps fading.
$NQ was setting up to put in a lower high, r/r wasn't great unless one would have set the target down in the 40s, but still seemed favourable given the quick pop; Shorted some at 9.70
Given the consolidation, lowered my stop to 9.72ish
And here's the quick fade I was looking for, I covered low .60s and .56 when it seemed it might bounce off 9.55
Moments later it took low out and faded away
Lol, and this just happened (and later dropped to low 7s, but who would have known that ...):
* buys/covers are marked on the charts in blue, sells/shorts in red *
Most days I come to the market with a few trade ideas, but those get put aside to focus on the pre-market runners.
Today, for the xxxth time, I've learned how important it is in fact to focus more on the former rather than latter.
This is the daily chart, clearly overextended:
My plan was to short pops with yesterday's high being risk, though I would have left it room until 2.50 u/o
This is how it shaped up on the two day chart, see how it tested yesterday's high and couldn't hold
Here is the intraday chart with my entry and exit:
I considered holding o/n for a possible gap down however I didn't like that eod perk, so I covered.
Made many mistakes on trading $SCOK today - most will have been avoided had I adhered to my "NO PREMARKET TRADING" rule.
I made a habit the past two weeks to sit in front of the market earlier and earlier (with the Ebola craze it seemed like a must), and was a bit more relaxed about premarket trading.
Today, with the Ebola stocks being demolished, my plan was to observe the market and not place a trade until a few minutes after the open (my usual game of plan) however the temptation much was too much and I started trading $SCOK when both liquidity and spread weren't favourable.
I hadn't developed a proper bias, so I switched my position a few times, and the lack of conviction results in accumulated losses.
That set me up for the rest of the morning, broke one rule, made a bad trade, started the day with a loss, and instead of re-focusing, I decided I needed to make that money back, and to do so, be more aggressive (risk more size).
That broke a further rule of mine about position sizes.
As for $SCOK, apart from my poor pre-market trades, I made pretty decent entries on the rest of the trades. However the emotional baggage of the premarket losses had clouded my judgement and I was in the "make it back" mentality, instead of "making good trades" mentality.
Hence whereas usually I'd take some money off the table when a trade goes in my favour 10c+, in this case I didn't, because I wanted to make it ALL back.
So I had let good trades with a good r/r and entry that had gone my way turn into losers.
Main takeaways are simple - what has proven to really work for me, is sit on my hands until at least fifteen minutes after the open when the picture is clearer.
Had I done that, I would not have been so greedy with my $SCOK trades and had ended the day with some nice profits.
This is the chart as of when I stopped trading $SCOK
* buys/covers are marked on the charts in blue, sells/shorts in red *
