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Monday, December 19, 2016

Trading Recap 12/19/16

Another small losing day although the process was slightly better. Some improvements need to be made but nothing crazy. I did much better with just focusing on the best trades that I saw right away vs. random other shit that I don't have much confidence in although that too still needs work.

XGTI: This had the chance to be a decent winner but I mismanaged the position and had poor entries with the size I had and I kept trying to add size with a tight stop using the level 2 levels where the offers were absorbing a lot but it just came down to using the chart in the end. I've been burned using the level 2 too much so I will be phasing that out except for certain scenarios. It would keep holding a level on the offer then go above it a few cents and then come back down. It is hard to set a true stop other than giving it enough room based on chart levels which is what I should have done. Of course the levels I saw could have held and that could have been it but I guess the first lesson here on these diluting stock plays is that just because an offer holds at a certain level and is absorbing, that doesn't mean it won't go through it a bit more at least. Just use the chart and some level 2 for a general sense of "ok, they are diluting and it is heavy". Anyway, it started ramping up in the morning and the top ended up being where it broke out slightly but that small push was it. It was hard to say that that was the top and I definitely didn't want to get run over and I saw no need for picking a top. While it would have been nice to short at the high, I don't really regret that. It came off a bit and it was still holding up at that point. I knew it wasn't going to be that easy and I figured that it would have at least fuck over some shorts at least by doing something more which would provide an entry. It perked on bigger volume on the 1min and it definitely looked like a stuff and that did end up being a very good stuff. Normally I wouldn't have bothered to look for a top in a scenario like this but going through SEC filings I knew they had an effect out and overall these R/S plays just fade back where they came from because they are being diluted. So I had all that going for me. The stuff at 4.70 was worth a shot with all these combined. But either way it faded off below vwap and I figured it looked like the type of play to just stay and hover under vwap and then continue lower which is what it did. I shorted because 4.30 was definitely a level but also my idea was vwap over/under. It stayed under vwap and when I thought it would have immediate continuation I added in but I was too early on the add and so now I was stuck with a bigger position than I would have liked. It never violated that 4.30 though but I wanted to play it safe. I got out and then reshorted. I basically kept trying to be cute with it like I said I shouldn't be and just kept doing stupid shit in the consolidation until it finally broke down but now with all the stupid shit I did I had a bad average. I ended up adding when I really felt it was going lower and it did go to $4 but then hung around. I was looking for more followthrough so when it went back to my average with the I sized down. It climbed back up before coming back down. It was good I still had my original and gave that enough room as it did go higher than I thought it would before coming back down. I moved my stop down because I thought it shouldn't get back over $4 once it was nicely under it but once the $3.80s broke and then reclaimed, I had a feeling it wouldn't go lower right away and I was right but I was willing to give it the benefit of the doubt considering all the things going on but my moved down stop got triggered which got me out. It went back to my average so I guess I would have gotten out for flat vs. a small profit but it did end up going to my original target. Lessons: Even with these stocks that are diluting, the levels on the level 2 aren't exactly perfect so just go by the chart as per usual and give things over/under room. Don't add then get out and keep doing it. Don't be cute with stops either or your orders. Just use the chart and short pops and that's it. It is nice if you can add with tight risk but if it means you just get chopped up then fuck it.

JBL: Looked good for a fade based on the pattern I saw. I shorted it and it had immediate followthrough but then started coming back towards my price and it wasn't because I was afraid of losing but the pattern I saw should have more immediate followthrough and no retests so when it got back to my price I just got out for flat. That ended up being a good call because it went higher then lower and didn't do much the entire day. Overall, it was good process in my opinion because I shorted when I thought I had edge but when it wasn't doing as I planned I got out. I was contemplating whether or not I was just being too quick about it and should let it play out but I decided if it was coming back up it probably wouldn't work at that instance anyway.

DUST: I went long at the end of the day when GDX/NUGT had good patterns. It was a bit iffy but it was worth a shot to try with smaller size. I wasn't 100% on it but with the way it acted with the market during the day and with the pattern I thought it had a decent enough shot of working. It perked a bit after I bought a dip but as it was near the close and GDX was starting to rebound, I knew it wasn't going to happen so I just moved my stop up and got out. It was worth a shot in my opinion. It was good that I was still scanning for setups later in the day.

LOXO: Just a breakdown trade going into the close that I did on small size. I am going to avoid breakdown/breakout trades like this going forward because I just don't like them and the risk is hard to quantify. I will examine these going forward but they definitely aren't a favorite. I have a hard time trusting them because you never know if it is a fakeout or not. I said no more arbitrary stops and with these you kind of have to unless you want to give them much bigger room. It is something that should only be used in the rarest of circumstances.

CLVS: Tried shorting it which would have worked great but these offers/bids absorbing on these news plays are just not reliable. It goes above/below them and you get stopped out then it goes back in that direction and then you are afraid to try it again. Not even afraid but not wanting to get chopped up time after time of trying them like what would have happened on the casinos. Overall, not worth it. They ended up working later on as the downtrend continued but after I got out the first time I figured the other times it wouldn't work, which ended up being incorrect. Process wise I think I would honestly rather miss out then get chopped up trying these stupid trades.

Things to remember:
1. With breaking news, don't bother with offers/bids absorbing. They work at times for sure but unless you feel very strongly about something then it probably isn't worth it. More experience will be needed though on these sorts of plays to make a definitive judgment.
2. Forget breakout/breakdown plays for 99% of the time.
3. Even with these stocks that are diluting, the levels on the level 2 aren't exactly perfect so just go by the chart as per usual and give things over/under room.
4. Don't add then get out and keep doing it. Don't be cute with stops either or your orders. Just use the chart and short pops and that's it. It is nice if you can add with tight risk but if it means you just get chopped up then fuck it.
5. Haven't said this in a while but.. TRADE THE BEST, FUCK THE REST. TRADE THE SETUPS THAT MATCH YOUR STRENGTHS. 
6. When downtrending, stocks can pop up a bit more than you think before they continue going lower. 

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