Monday, April 21, 2014
Monday, April 14, 2014
Trade Price Action Not Speculation
Albert Einstein once said “A man should look for what is, and not for what he thinks should be.”
Price action is the only thing that will tell you where the stock is headed. Everything else is opinions, hopes and dreams. You need to trade price action and ignore the message boards, chat rooms, projections, news events and other garbage. When trying to predict where a stock will go because news or a new product was just released is like trying to predict where the market will go. Remember, the market is always right. Have you ever seen a company releases earnings that were better than expected and the stock drop, or a company release earnings worse than expected and the stock rallies? That is because sometimes information or anticipated news/products are already factored into the price of the stock. Never try and justify the reason why you are still in a stock that isn't doing exactly what you want or predicted to do. When you start justifying the reason why you are holding a stock, you need to get out of it.
Today was a perfect example of this regarding ERBB. Last night in chat, about 3 people kept asking how much ERBB would spike tomorrow because they just released one of their vending machines. My only advice was to watch price action and be cautious of any pot stocks due to the recent rash of MMJ stocks getting halted (5 in the past month). They just kept on about how this company was “real” and had “real products”. I reminded them that PHOT was real with real products and they got halted, but I guess the advice went unheeded. Well I logged into chat this morning before the market opened and about 15 people were all excited about ERBB and trying to predict how much they would make today on ERBB with their recent vending machines. They noted that ERBB was already up 21% in Pre-Market. I once again advised to trade price action, as the news of the vending machines might have already been factored in the price of ERBB. I also stated that IF I got into ERBB it would be during a dip AFTER the Pre-Market profit takers. Well sure enough ERBB went from opening at 21% to 25% in the first 5 minutes. Chat was lighting up with ERBB cheerleaders. Well then the predictable pattern happened and ERBB starting to dip down to 18%. Some people jumped in, I held off, advising that I believed ERBB had more room to dip. It then went up to 20%, then back down to 15%, up to 18%, down to 10%. I decided I wasn’t going to enter ERBB, so it was time for me to head to bed. Before I left the chat, the last message was somebody saying ERBB will skyrocket when they release news later in the day. I just closed the lid on my laptop and called it a day. ERBB closed -5% today.
Morale of the story:
#1 – The market is always right
#2 – Never try to predict news
#3 – Remember, just because news or a product just got released, that catalysis might have already been factored into the price of the stock
#4 – Trade price action
#5 – Most of the time, activity in After-Market & Pre-Market is irrelevant. Don’t let AH & PM dictate your plan
#6 - Don't attempt to justify the reason why you should stay in a trade
Disclaimer: At the time of this post, I no longer hold a long or short position in the above mentioned securities. I may or may not re-enter a long or short position in the above mentioned securities without notice after the publishing of this blog post. I have never been compensated in any way for my mention of the above securities.
Price action is the only thing that will tell you where the stock is headed. Everything else is opinions, hopes and dreams. You need to trade price action and ignore the message boards, chat rooms, projections, news events and other garbage. When trying to predict where a stock will go because news or a new product was just released is like trying to predict where the market will go. Remember, the market is always right. Have you ever seen a company releases earnings that were better than expected and the stock drop, or a company release earnings worse than expected and the stock rallies? That is because sometimes information or anticipated news/products are already factored into the price of the stock. Never try and justify the reason why you are still in a stock that isn't doing exactly what you want or predicted to do. When you start justifying the reason why you are holding a stock, you need to get out of it.
Today was a perfect example of this regarding ERBB. Last night in chat, about 3 people kept asking how much ERBB would spike tomorrow because they just released one of their vending machines. My only advice was to watch price action and be cautious of any pot stocks due to the recent rash of MMJ stocks getting halted (5 in the past month). They just kept on about how this company was “real” and had “real products”. I reminded them that PHOT was real with real products and they got halted, but I guess the advice went unheeded. Well I logged into chat this morning before the market opened and about 15 people were all excited about ERBB and trying to predict how much they would make today on ERBB with their recent vending machines. They noted that ERBB was already up 21% in Pre-Market. I once again advised to trade price action, as the news of the vending machines might have already been factored in the price of ERBB. I also stated that IF I got into ERBB it would be during a dip AFTER the Pre-Market profit takers. Well sure enough ERBB went from opening at 21% to 25% in the first 5 minutes. Chat was lighting up with ERBB cheerleaders. Well then the predictable pattern happened and ERBB starting to dip down to 18%. Some people jumped in, I held off, advising that I believed ERBB had more room to dip. It then went up to 20%, then back down to 15%, up to 18%, down to 10%. I decided I wasn’t going to enter ERBB, so it was time for me to head to bed. Before I left the chat, the last message was somebody saying ERBB will skyrocket when they release news later in the day. I just closed the lid on my laptop and called it a day. ERBB closed -5% today.
Morale of the story:
#1 – The market is always right
#2 – Never try to predict news
#3 – Remember, just because news or a product just got released, that catalysis might have already been factored into the price of the stock
#4 – Trade price action
#5 – Most of the time, activity in After-Market & Pre-Market is irrelevant. Don’t let AH & PM dictate your plan
#6 - Don't attempt to justify the reason why you should stay in a trade
Disclaimer: At the time of this post, I no longer hold a long or short position in the above mentioned securities. I may or may not re-enter a long or short position in the above mentioned securities without notice after the publishing of this blog post. I have never been compensated in any way for my mention of the above securities.
MCIG Trade Recap
Played $MCIG for a quick 3% spike in the morning. Entered at $0.745 @ 9:32, Exited $0.773 @ 9:51.
$67profitMCIGLong Stock
Morning mover. Was being pumped & had a small article by CNBC. Nothing major, so I scalped a small position. HOD was .078 so I almost called exact high.
Disclaimer: At the time of this post, I no longer hold a long or short position in the above mentioned securities. I may or may not re-enter a long or short position in the above mentioned securities without notice after the publishing of this blog post. I have never been compensated in any way for my mention of the above securities.
$67profitMCIGLong Stock Morning mover. Was being pumped & had a small article by CNBC. Nothing major, so I scalped a small position. HOD was .078 so I almost called exact high.
Disclaimer: At the time of this post, I no longer hold a long or short position in the above mentioned securities. I may or may not re-enter a long or short position in the above mentioned securities without notice after the publishing of this blog post. I have never been compensated in any way for my mention of the above securities.
Friday, April 4, 2014
FRTD Trade Recap - Sometimes Rules Lose You Money
Today I got into $FRTD at $0.044 for an intraday breakout. Well I followed my rules and set my lose at $0.0418 (5% lose). $FRTD ran to $0.05, then came back down and shook me out. Well I then went to bed, woke up to find that FRTD had a day high of $0.07 (75% gain), closing at $0.0623 (53% gain). So by following my rules, I took a $50 lose and left $750 on the table. Time to rethink my rules and study intraday trading more.
Disclaimer: At the time of this post, I no longer hold a long or short position in the above mentioned securities. I may or may not re-enter a long or short position in the above mentioned securities without notice after the publishing of this blog post. I have never been compensated in any way for my mention of the above securities.
Disclaimer: At the time of this post, I no longer hold a long or short position in the above mentioned securities. I may or may not re-enter a long or short position in the above mentioned securities without notice after the publishing of this blog post. I have never been compensated in any way for my mention of the above securities.
The Power of Pumps
Today I personally got a front row seat to see exactly how powerful a pumped stock can be. I got into $FRTD at $0.044 for an intraday breakout (up %2 on the day). Well following my rules, I cut my loses at $.041 and went to sleep. I woke up to find the stock ran up to $0.078 (%75 gain). So by following my rules, I left $775 on the table. Well I logged into twitter and found the #wolfpack had pumped the stock and it just ripped right through .05 & .06.
Moral of the story: Never underestimate the power of a promoter.
Disclaimer: At the time of this post, I no longer hold a long or short position in the above mentioned securities. I may or may not re-enter a long or short position in the above mentioned securities without notice after the publishing of this blog post. I have never been compensated in any way for my mention of the above securities.
Moral of the story: Never underestimate the power of a promoter.
Disclaimer: At the time of this post, I no longer hold a long or short position in the above mentioned securities. I may or may not re-enter a long or short position in the above mentioned securities without notice after the publishing of this blog post. I have never been compensated in any way for my mention of the above securities.
Monday, March 24, 2014
BGMD Trade Recap - Always Follow Rules
BGMD Trade Recap
Here is a lesson learned and why it’s extremely important
to follow your rules. Pre-market 3/20/14 news hit my equityfeed news stream
that BGMD released their 2013 Fourth Quarter and Year End Financial Results. I
read through the report, earnings were good for both the Fourth Quarter and
Year End. Ten minutes later BGMD announced issuance of a patent covering Galectin-3
testing. By market open, BGMD was already up 25% pre-market. I placed my limit
order at $2.28 for 429 shares. The price was currently $2.30. About 5 minutes
later I got 429 shares filled at $2.28. I had already set a mental stop for
$2.21 per share (approx. 3% loss). The price hit $2.22; I already had my sell
order set up for $2.21 with my hand on the trigger (as Tim Sykes teaches). The
price hit $2.21 per share; I sent the sell order in. I got all 429 shares
filled at $2.20 immediately. The price per share would not trend back above
$2.20 for the rest of the trading day. BGMD closed the day at $1.92.
At the end of the day the trade was closed out at a $34
loss. If I would not have followed my rules, the losses would have been much
worse.
I can’t express enough the importance to cut your losses
quickly. This is my #1 rule.
Disclaimer: At the time of this post, I no longer hold a long or short position in the above mentioned securities. I may or may not re-enter a long or short position in the above mentioned securities without notice after the publishing of this blog post. I have never been compensated in any way for my mention of the above securities.
Disclaimer: At the time of this post, I no longer hold a long or short position in the above mentioned securities. I may or may not re-enter a long or short position in the above mentioned securities without notice after the publishing of this blog post. I have never been compensated in any way for my mention of the above securities.
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