Phew! My most intense trade is finally over, and I've come out on top! It was not easy, but I also also wasn't ever really worried about my short position as I built it this week, even though the position was a bit of a scary position in the end (1k shares short on a mini-supernova type play). I still have a lot to learn and improve on though, but this is just another stepping stone I can use to hopefully turn myself around to becoming consistently profitable.
First, I decided to cover at $8.05 today after the dip under $8 rather than try and ride it out more for more downside. I could have covered into the dip under $8 but wanted to see how far it'd go. Right now it's down to $7.90 (basically ~$150 extra dollars profit, nothing), and looks like it can keep going, but I felt like I would be getting too greedy not taking what the market was offering me, considering I took this position over 4 days, did overnight shorting, and missed out on some earlier easier moves that would have netted me a lot more money if I were experienced and good enough to catch them.
The stock is down over $1 on the day now, which is like 11%, and I still think it has room to fall multiple dollars more still over the next week, but I'm done with this trade. Trying to squeeze out the most money from this trade just doesn't matter to me after it made it's big move down, and all my positions were profitable. Once I learn how to take better trades, I can do this in a matter of hours rather than days and take on a lot less risk.
Had I better entries from the start and waited more, I would have had larger gains as all my entries should have been above $9, in hindsight. Because of that, it's "ok" I'm not trying to ride it all the way down like I wanted to, because tomorrow is Friday, SSR is going to be on again probably, so I'd rather take the meat of the move on this big first red day, and call it. There's always next time, and lately I've been seeing amazing shorting opportunities I've passed up because I was in this trade and didn't want to have too much going on at once.
I've learned a lot watching this stock this week and shorting it, but I still have a lot of work to do. My first 2 entries were still way too early, as I knew I wanted to wait to short this as I had been watching it run up since the $5s (and lots of shorts getting burnt), but I need to improve my mentality so I wait for a big spike to signal when I should start getting short, rather than look to short the uptrend weakness going into the close (which is what I did on Monday, but was still a few hours too early).
Slowly scaling into my position was something I finally did right. By doing that, if I was way wrong, I could get out for a small loss and restart my position higher if it started to run towards $10. Unfortunately, I wasn't quite prepared to handle 2 huge spikes a few days ago, and missed adding near the highs because I was trying to gauge a range for my position. Likewise, some of my adds during the week were too low as I didn't keep the bigger picture in mind. I should have only been adding above $9 but got some lower adds when I thought weakness was setting in.
From the start, this was a bit of a risky trade, but that's why I took small size to get some shares and start following it with money. Had it gone full supernova, I would only have been out a few $100 and could have waited for the run to end. I had a thesis on why I wanted to start shorting when I did though, but I was still a bit too early entry wise for that thesis, as I ended up adding 30c lower than I should have, and had a second position higher.
I wanted to make sure I had shares reserved for the way down, but this thing was a lot stronger and held longer than expected, making some insane daily moves past few days that would have been great to profit on, if not for already being in a position. With that said though, I felt this move was fueled purely by stubborn shorts, so I felt my timing for taking the trade was spot on, and I did manage to catch the top range and the start of the downside. However, it's Friday tomorrow and while this has no reason to run again now, I've seen stranger things happen, so I'm locking in profits and moving on to the next play.
The end result of this trade is ~$683 in profits.
Since it is Friday tomorrow, there's a lot of recent spikers I want to short, but just can't because of the short squeeze potential and not wanting to overnight short the weekend. I'll most likely have to not trade at all tomorrow, and just relax, and come back Monday with my newly acquired experience to move forward. I'm really excited though, as this was finally a solid plan I stuck out and was profitable on. I was hoping for more profits, but like I said, I've got a long ways to go before being able to focus on that.
Anyways, just a short blog post about this trade, no real takeaways other than I'm working on switching my bias to short, been having better results, so I'll continue working on it in hopes of becoming consistently profitable this year.
Thanks for reading, happy trading!
Posted Apr 19, 18 1:48 PMbywannabestocktrader
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Just for future reference, $I closed at $9.19 today. Running from a low of $7.88 to $9.21 in the afternoon, I made a really solid decision as I'd be down almost $600 now, holding into a Friday on a major reversal had I just held all day.
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