Today was my new best day at the firm (although not my best day ever). It definitely could have been A LOT more of a day and I left a ton on the table. There are definitely still psychological issues at work still although I hope I am drawing the energy from my negative beliefs into more positive ones as I gain more confidence in my ideas. Going into the day I was long biased on the shipping names until the DRYS situation was resolved. When I heard it would be unhalted and there would be an offering then I was leaning more to shorting although was staying cautious in case everyone shorted again and squeezed it up, so I was keeping an open mind. That is why I didn't do anything out of the open. Eventually everything started falling apart so I just shorted breakdowns etc and made some decent money. I covered way too early on these thinking that it would be a pop, drop, pop, drop scenario as these would have to filter out shorts but that wasn't the case at all. I guess one thing I struggle with is going from my usual conservative self to risk on mode on days like today. I do have to get better at that - the rules I have protect me and I am better off for them on 99% of trading days. These 1% days though offer a lot of opportunity so it is worth it to learn how to go from conservative to risk-taker and then back to conservative. I don't really have a process in place in order to achieve that - I believe that will just come with time and more exposure.
ESEA: Looking back, I definitely messed up this trade and trading this name altogether. I saw that they had an ATM facility so it would be the weakest out of all of them if it were to fade. I wasn't paying too much attention at the open because like I said I wasn't sure what was going to happen. But it did form a nice base and then broke down from that. Obviously, I don't like shorting base breaks but on days like today and when the tech stocks were tanking, there is clear followthrough that happens and it's ok. Shorting breakdowns is only for times like these. After it came off it formed a nice pattern that I shorted the breakdown of. That was fine but what wasn't fine was putting my cover at just the next support and then seeing it go down $2 more. Stupid. Like I said above, I thought it would be more of a rotating out shorts and going down with a nice downtrend and not just complete wash. So that was my mistake. I also thought that since I was shorting the breakdown I should just take it since I didn't have a good average. That is another mistake on days like today as well. Let them ride even when shorting breakdowns.
GSL: I saw this was running in premkt and the offering news came out and this tanked but then it recollected and went higher. This made me think they could all start going again. But it stuffed with huge volume at 4.50s and I was hesitant to short it then. It was definitely fear. I should have at least tried it even though I wasn't sure because even though I wasn't sure, I was very open to the possibility that they could fade off. So I think it fear that caused me to take that trade. This goes back to what I have said in prior posts and what I have been reading - you can't be afraid to lose. Losing is a part of the game and you have to accept the risks that come with each trade fully so that the market doesn't generate any harmful information to you. The thoughts that got me to not short it were that not all stuffs work like that.. etc. Stupid thoughts. It is the stuff + the situation that make it a good trade. In addition I wasn't sure if these would keep going up. I knew it stuffed but I didn't know if it would recollect and go higher. The fact that they were up even after the offering news was definitely a red flag to me. After the big stuff at the open it flushed and then came under vwap. I wanted a vwap test so put an offer near there but it never got there. I thought about putting it at the prior high but wanted vwap because I figured they would get people stopped out into a vwap push. Looking back though, I should have just went off support and got in there and risked accordingly to vwap. Trading is a funny thing in that sometimes you wish you got in at whatever price then other times you wish you got a slightly better price. But as mentioned in a prior blog post, I can't be pinching pennies here and be worried about that. That has cost me numerous times not only yesterday and today but prior days as well. It is a recurring problem that probably stems from being scared to actually get in the trade. I need to cut that out - it has cost me too much in potential gains. My actual trade was after it got under $3 and was consolidating I shorted. I gave it a bit past the consolidation area since I figured they would have to gun stops. I didn't know how much lower this was going to go so I put in a bid at the next support for a scalp. It worked out well and it did go lower but I'm not complaining too much about this one for covering early.
EGLE: This had a similar pattern to ESEA that I missed out of the open. I believe I saw it consolidating at the lows with a nice bear flag but I didn't take that either. I did just take the second consolidation/bear flag after getting a shitty fill but it ended up being my main gainer. I covered near the lows since I figured this was the last push lower. Not much else to say about this one other than I missed the first few entries due to having wrong bias/being too cautious. I will admit I was skeptical of the trade while in it but I figured at this point they were all fading.
Other stocks:
BBY: This was a big example and perhaps a big confidence booster even though I didn't take the trade. I knew I wanted to get long near the premkt low as that is a good area. It went to there and went a little lower but not by much. I didn't take the trade for 2 reasons: 1. I saw on level 2 it looked a little weak with offers absorbing but it held the support. So the first lesson here of course is as mentioned before: L2 is a tool in your arsenal but don't consider it the end all be all. 2. I was scared to put on the trade and be wrong. THAT IS WRONG. I also have to give things wiggle room as it went lower by a bit but not by much. So again over/under. I did put a bid but it never got there so I took it off. I thought it was done though as it had huge volume on the $43 break and it looked like a vwap stuff but it just climbed higher. So here is another lesson: just because it stuffs doesn't mean it's done. This may contradict what I said before on GSL but it doesn't That was a huge stuff on a pump name vs. a legit earnings winner stock. Here it just took a lot of buying to get through a certain level of sellers but buying continued throughout the day. Anyway, I figured I would let it prove itself and let it go to vwap and then I could buy it. When it was under vwap and under $43 it was more sketchy for sure and I could have waited for it to get over vwap but that didn't have to stop me from taking an entry. Anyway, when it dipped to vwap and by the time I saw it, it was a bit off the vwap dip to the .90s. I didn't want to risk that much for some really stupid reason. So lesson here is to not care about the pennies etc. Just go for it. There were other opportunities later in the day for buying breakouts that I didn't take. One other thing to note of course is that it made a fake high then came back down but then came back up and went higher. So again fake highs and lows are just prices that were transacted at, at that particular time. They can get stops and flush people out but that's fine.
NVDA: I had this on long watch if it setup. I wanted to buy it at yesterday's support area. It made a new high at the open and then just came off right away. I thought it would fade the rest of the day then because of the fake high and so didn't buy at the support level. It went to the support level and a little under it (over/under) and that was the bottom and it made new highs. So lesson here is again not care about the fake highs and lows and just trade the plan and give it enough room.
SCON and BNSO: I didn't trade these. I was scared to put on a trade on these due to wanting to protect profits. I also wasn't sure if the low float mania would continue or not but again fear prevented me from trading these. As for actually trading them, the stuff worked on SCON but one thing to note is how it double topped and then gave the goods out to shorts. So anything can happen on these. For BNSO it stuffed but then continued higher. So again, what you think is high volume may not be high volume when you see what happens later on.
Things to remember:
1. Work on going from conservative to risk taker on days like today.
2. Shorting breakdowns is ok when there is momentum like today. You don't have to cover right away when you short them either, let them work in situations like this.
3. Losing is a part of the game and you have to accept the risks that come
with each trade fully so that the market doesn't generate any harmful
information to you.
4. I can't be pinching pennies here and be worried about that. That has
cost me numerous times not only yesterday and today but prior days as
well. It is a recurring problem that probably stems from being scared to
actually get in the trade. I need to cut that out - it has cost me too
much in potential gains.
5. L2 is just a tool but not the end all be all. Don't let it interfere with plans.
6. Over/under is key.
7. The stuffs/big volume don't have to mean the play is done. Be aware of that and the context it happens.
8. Don't let the fake highs/lows scare you out or make you change your plan.
9. For stuffing volume remember there can be a lot more volume at higher levels.
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