Yup, Even A $12 Loss Offers Important Trading Lessons
Posted by Timothy Sykes on Fri 21st of Mar, 2008 02:04:04 PM
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Why bother detailing a $12 loss? Because every trade matters, the good, the bad and the scratches. Important lessons are everywhere…
Shorting 400 COIN at $8.78 right before the market close on Wednesday turned out to be a good idea. I shorted because the stock was breaking down over multiple time frames, intraday, multi-day and multi-week, failing to hold keep support at $9 that I’d expected to put up more of a fight. And the daily wall of sellers have entered. Oh yeah and the company is a true POS—no pumpers or Garty the faux guru—can change that. Only problem was I had a Thursday morning meeting so it’d have to tank quickly or I’d have to risk it while I was away from the computer.
Since TIM is so tiny (must protect every $ to get the magical $25k SEC freedom hump), I’ve never used stop losses and COIN is known for squeezing shorts, holding was out of the question. In after-hours action Wednesday night, I tried taking a $100ish gain at $8.51, but discovered Thinkorswim closes after-hours action at 6:30pm. Wasn’t that pissed until the next day when the stock gapped higher to the low $9s.
But even with 20 minutes to go before my meeting, I still held since the gap looked shaky…3 minutes later, the stock was unchanged back at $8.72 x $8.80…good decision to guess the downtrending would remain in place…I waited a few more minutes but the buyers held $8.70 well, so it was a possible bottom…running out the door, I covered my shares at the exact same price I shorted, $8.78…losing $12 due to commissions.
One hour later, I got back to find the stock down to $8!?!?!?!?! Probable wall of sellers entered, gradually pushing those determined buyers outta there. Early exit as usual, pisses me off, but it’s a great lesson:
TIM Lesson: To maximize your trading gains, never schedule intraday meetings
No coulda woulda shoulda here, my meeting yielded about 10x what I mighta made on this trade, such is the reality of a publisher / trader not a trader /publisher. More importantly for you, this drop was predictable. Especially when you see it went from $8.50 to $below $8 on huge volume in less than 5 minutes—can you say stop losses getting taken out? Classic classic classic Supernova pattern breakdown. Where the bottom is, nobody knows. Wouldn’t be surprised to see the stock below $5-6 in a few weeks, but I’m not betting on it—not with my portfolio so small—spike risk galore…You’ll see as my portfolio increase and I have some cash to spare, only then will I take on some longer term shorts…
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TIM Trades
View All| Date | Stock | Buy | Sell | Net |
|---|---|---|---|---|
| Nov 19 | AENY | $2.80 | $3.02 | $1148 |
| Nov 18 | NLST | $4.16 | $4.40 | $947 |
| Nov 18 | IMGG | $1.42 | $1.64 | $2094 |
| Nov 17 | NLST | $5.04 | $5.59 | $2195 |
| Nov 13 | VRMLQ | $21.50 | $22.97 | $2901 |
| Nov 11 | EONC | $2.61 | $2.80 | $687 |
| Nov 10 | EONC | $2.74 | $3.36 | $9784 |
| Nov 6 | QXM | $4.31 | $4.80 | $1936 |
| Nov 4 | COT | $8.66 | $8.88 | $642 |
| Nov 4 | QXM | $4.61 | $4.89 | $822 |
| Oct 30 | DDRX | $25.70 | $26.53 | $812 |
| Oct 29 | CTDC | $4.00 | $4.42 | $781 |
| Oct 26 | AWSL | $3.24 | $4.10 | $2516 |
| Oct 23 | RODM | $5.27 | $5.23 | $301 |
| Oct 22 | AMLM | $2.69 | $2.97 | $820 |
| Oct 22 | USEG | $6.12 | $6.09 | $85 |
| Oct 20 | CBOU | $8.93 | $9.06 | $243 |
| Oct 16 | VRMLQ | $16.79 | $18.65 | $2773 |
| Oct 13 | YONG | $11.05 | $11.66 | $1202 |
| Oct 13 | NPHC | $0.59 | $0.71 | $583 |
| Oct 12 | IMGG | $0.60 | $0.70 | $682 |
| Oct 9 | ZAGG | $5.50 | $6.10 | $2380 |
| Oct 7 | GVBP | $0.03 | $0.27 | $702 |
| Oct 1 | NPHC | $0.70 | $0.85 | $1482 |
Total: $98,094 (681%)
