I bought back into $VVUS in the October/November timeframe as it was dropping with the expectation of a rebound. Since I didn’t log it back them I cant be sure, but im fairly certain that I bought it without the ability to monitor the trade. Im sure it began dropping when I was not around to cut losses and I let it continue to drop. I became a bag-holder, the last thing you want to be in ANY stock long or short.
March 26th , With the news of a North Tide Capitol purchasing 202,000 shares VVUS began to uptrend from the 1s. I am watching this with the intention of taking a loss as it gets closer to my purchase price worse case, selling for a scratch or taking a small profit. It continues to uptrend and eventually breaks the 13 EMA and shortly after the 50 EMA and 50 SMA. According to my rules this is the place to buy if I were in the position to be buying. Since my focus is getting out of this position I have no intention of buying. I want to watch and see if the chart follows my predictions.
March 27th, There is resistance at 1.25 on several time frames (1, 3, 6 month chart), if it can break above 1.25 it should increase more.
March 30th, It broke 1.25, great sign for a breakout.
March 31st, It increased to the next support level (1.4ish). I anticipate a further increase since the rise is still gradual. This is exactly what I want. I don’t want a gap up or quick rise until it gets closer to my purchase price. A spike in my mind will be anything over 25 cents. It finished low, bad sign, but it is holding above my EMA levels which is according to my rules and a positive sign.
April 1st, I should have dedicated my day to trading or at least watching my position closer…I went on a date and missed an opportunity to sell my position for scratch. However, it is following my EMA rules perfectly and uptrending slowly. This is what I want, so instead of selling for a small loss or breakeven later in the day I choose to hold over the weekend. It closed well.
April 4th, NOW is when I want that gap up and spike that has been building. However, it opened with low volume. I switch my chart frequency between 5 and 1 minute to get a better view of the health of the chart. I am constantly asking myself (what is the chart trying to tell me!), because of the low but gradual volume I am thinking it will continue its climb. I however cannot watch my position today. Ideally I would like to sell my 1.52 position at 1.75, however I need to get out and taking greed out of the equation I believe it has legs as far up today as 1.65 perhaps. I set my sell at 1.63 to anticipate resistance above 1.6. I walk away and do what I need to. My order is filled later in the day at 1.62 and I am happy.
Two thoughts that I kept in mind the entire last days:
-You are trying to learn not profit, if you profit great but take a small profit and watch the chart to see if it follows your hypothesis.
-You know that your weakness is walking away from a position without being able to monitor it. If you cannot watch it you must get out, no matter what potential it has. Use it as a learning experience to confirm future chart action. NEVER WALK AWAY FROM AN OPEN TRADE RYAN!!
Excellent exit trade, very poor entry trade (you walked away, and you sized down as it was falling rather then getting out)