Friday was another pretty bad day. Some lessons were learned though so it wasn't for naught. Unfortunately I ended up giving back all of Tuesday and Wednesday's gains and then some between the last two days. Definitely sucks. Some things off the top of my head: Thesis > minute price action. Don't always be short biased on these. It is dangerous and you are missing potential long opportunities. More to come below.
MGT: I saw this gapping up on BS news so it was instantly on radar. I waited for a good entry in the morning and got it with a perfect entry 4 cents off the high. After a little bit I was 20 cents in the money but figured this would fade a lot more since the trend was broken at this point. I was looking to add under vwap but wanted to wait for more confirmation. I don't regret not covering at this point at all. I waited to add since it was just chilling around vwap. Lesson: Unless it's clearly peaking a level/vwap, don't add/get in. There came a point though where it looked like it reclaimed vwap and I started to think maybe this needs to squeeze out higher since everybody might be shorting this. I should have at least put a breakeven stop at this point. My thought process was it might need to stuff a little bit and go higher first. But I didn't really have a concrete plan in mind as to where I was comfortable with it going. While at the time even though it looked like it reclaimed, the big picture idea was that it could definitely come back down due to bagholders. I didn't want to get stopped out near where it would end up topping out as I was pretty confident at the time. Looking back at the chart though - between the last few days and the daily chart and the hourly chart there is huge resistance at 2.80-3. If I wanted to let it go against me I should have been prepared for that. Instead I went in without that information and ended up covering the 2.64 short at 2.80 (near the top). I think the best thing to do was to set a breakeven stop - if it does something right afterwards then you can always get right back in - like you did on FTNT. So one lesson here: You used to diligently plot the important support and resistance points. The past few days you stopped for whatever reason. Make sure you plot these points. After that I tried to reshort where I covered thinking that was it but not having a real clue that it would be it and I lost a little extra trying that stupid trade trying to pick a top. Second lesson: Don't pick tops. Wait for more confirmation in these scenarios. Afterwards I reshorted when it got under vwap since I figured that was it and there was decent evidence it could now go lower. I waited around but it wouldn't break down under .50 so I covered for a small gain. It eventually came back down but then went right back and looked like it reclaimed. Towards the end of the day I saw it broke under .50 again and I thought we could have EOD wash so I shorted under .50s and it didn't completely wash but it made a new low and I got a small scalp out of it. It ended up being a small loser for me overall. It could have been a small-decent winner had I done some of the things mentioned here in the lessons. Overall, the first short was completely fine. Again, I still don't regret not covering a bit on the wash below vwap but I should have played more defensive and got out at breakeven or covered when I had second thoughts about it after it reclaimed vwap. The second trade shouldn't have occurred since that was just random guessing that was the top. I would not have shorted in the .80s and would have waited for .90 or something at that point but had I just waited for the backside instead where I reshorted it, I'd be slightly positive on the name instead if I did that and covered for breakeven earlier.
CTRV: This ended up being the main loser and I'm not really sure why I was so persistent in trying to keep short it and when it did actually present a nice blow off top I didn't short it then. Looking back at the chart, sure there were some possible tells it could go lower in the morning and the short there was fine but afterwards, it definitely looked like a good long. Anyway, I saw some stuffing a few minutes after the open and wondered why it was up a second day so I shorted. It wasn't a good entry but I figured it was alright since I have seen a lot of these work even if it has to just screw around for a bit. I gave it to the lower high and it went there and came back down and held. I got stopped out but still had a short bias. Looking at the chart at this time, it was clear it was a very good long pattern. After it was consolidating at the highs, I saw it made a new high by a few pennies and then have no followthrough so I figured that was it. I tried reshorting and gave it a couple of cents to see if the pattern was good but it wasn't so I stopped shorting it. Instead it looked like it was consolidating a little higher and was heading higher. Again, don't pick tops. You could have waited for it to drop and then retest for more confirmation vs. just randomly picking tops. Is this hindsight? Perhaps but it's essentially a pattern in reverse of what I look for when shorting. And again thesis > price action. It had the blow off top and I shorted when it got to the prior resistance and got a top tick entry which was good. I ended up covering a little prematurely due to some small blip when it broke down on volume but came back up a bit. It ended up going to vwap which is where I wanted to cover but either way I had a tiny gain on that. I then tried to reshort even though it looked like it had reclaimed vwap and it was going to dip and rip. I ended up covering at the top of the lower and the worst part was I did more size all the times I was wrong and did smaller size when I was right. So no real plan for that other than the what if it goes higher - the plan was 1.80s over/under. Later on I saw it reclaimed vwap and was heading higher so I didn't want to touch it but then it stuffed the 2 break and it seemed like premature EOD run so that would have been a good short I guess. I did short a little later and I saw all the level 2 tricks being played but held through that and it looked like I was about to get paid but then it just spiked out of nowhere and I had to take another loss on it. These EOD shorts on these types of stocks NEVER have worked for me other than for small scalps so I am just not bothering with them anymore. Lessons: Don't try to pick tops and look for the long setup on these if presented with one, overall picture/thesis > price action, sometimes the small blips work and sometimes not, give things enough room, don't bother with the EOD vwap stuffs/meh shorts on these types of setups/stocks.
Things to work on:
1. Thesis > minute price action.
2. Don't always be short biased. Look for the long setup if it presents itself.
3. Unless it's clearly peaking a level/vwap, don't add/get in.
4. For now, play defensive with the breakeven stop on winners that might turn into losers.
5. Make sure to plot support and resistance
points.
6. Don't pick tops. Wait for the backside if unsure. Less headache.
7. Sometimes the blips work and sometimes they don't, have the patience to see it through if you are confident enough - which you should since you are in the trade.
8. No more EOD stuffs unless they are premature on these small cap names.
9. Give things enough room.
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