Monday, May 12, 2008

A Good Trade

I'll have you know, I don't enjoy being the "trainwreck of the stock blogging Internets" day in and day out.

What other shithead is out there currently struggling like I am? Who has fallen as far as I have? The story doesn't end with me in the gutter, by the way. I figure this shit out and this little stretch is a blip I laugh about in 2016.

So tonight, I share a good trade I enjoyed today... I'll ignore the sad fact that I only had 200 shares on...

HCPG mentioned EXM in their weekend newsletter. This one has been showing up on their watchlist for the last couple of weeks. $47 was the number to watch. The stock gapped open, dropped a quick 80 cents or so, but then strongly bounced back to the highs.

I bought 200 shares up near the opening highs, which actually was a mistake. The stock was overextended, and needed time to digest the bounce. So it began to base. Now, what happened is that the stock headed back down to $46, where I had my stop and, assuming defeat, I gave up on the trade... I was pissed for buying before the stock based, and I walked downstairs to make myself a cup of tea. After last week, you understand, my confidence is at lows, and I almost expect every trade I enter to fail...

Of course, when I came back upstairs, only a few minutes later, I realized that I had just made myself a very expensive cup of tea. The stock vaulted through my buy point (actually providing me with a great chance to add to my position, which I was unable to do from the comfort of my kitchen while brewing tea) and straight to $47.

It's hard to add to a 200 share position... so I chose not to add any more at the breakout number. Instead, I threw in a sell limit, 1% above the breakout point. This number was easily taken out, so I added my second sell limit about a point higher from the breakout, at $47.90.

That was actually the high of the move. For about an hour, I was able to feel like a hero, selling at the high and all... problem is, the stock ran all day...

So, while my first trade worked out (even if I was a bit lucky) I left a lot of money on the table. The problem was not in selling... the problem was not watching the stock as it tested the original base that it emerged from. I could have had a nice, low-risk reentry down at $46.50... of course, this is a little 20/20 hindsight, but still... the stock was printing great volume... and was relatively strong. Other stocks in its sector were also strong... so, here is yet another aspect of trading that I need to work on, continuing to watch stocks that are behaving well even if I don't have a position for second opportunities.

Anyway, I was happy to finish green. I'm pissed I didn't have more shares, but after the carnage I suffered last week, it would have been somewhat irresponsible for me to trade heavy today. I need to up my win rate before I size up... it's frustrating, but true.

Here's the stats:

P&L, $190
Best, EXM, $222
Worst, MUR, -$45

2400 shares traded.
6 stocks traded, 3 winners, 3 losers.


sage08 said...

hi DT, i think i did better than you the past month or so.. i'll enjoy the bragging rights while it last.

Dinosaur Trader said...

There's a large crowd of people in your club.

In time, you'll all be back to polishing my shoes.