Hate to say it, but I have a red day here and I spent a good bit of time mulling over what exactly happened.
Two major things that I will cover a little bit more in detail as I get to the trades. The first is that I realized that I’m approaching some setups just completely wrong. In the past I’ve talked about categorizing my trades better and it’s clear after today that there is a bit more that I should do to be prepared for my setups.
- Time frame matters.There is a distinct difference in the way a day one trash name that’s gaping up on some bogus PR is going to setup and move versus a multi day runner that’s moving with a sector like EV’s. On the multi day trends I need to take the daily setup and where we’re at on the daily (front side vs backside) into consideration vs treating it like a day one runner move. There is a very distinct difference between the two as well as the audience that’s trading it. On a multi day runner there’s more time and chance that shorts are stuck in the move and fueling the upward momentum, so it’s that much more important that I’m aware of the context of the intra-day move in relation to the inter-day move.
- I cannot look at my P/L while trader…..ever. Today I’m pretty sure that the my downfall (that sounds so dramatic) was directly associated to me peaking at my P/L in the middle of the $KNDI trade, which put some blinders on me vs the price action, which then reversed, but because I was thinking about $$$ in my head, I let it come back to my level and then run right past me….Que Deer in the headlight syndrome. The funny thing is that before I peaked at the P/L i told myself…you shouldn’t do this, but I somehow justified it in my head about what I was doing and how it wasn’t that big of a deal…well let me tell you, for ME it is a game changer and completely takes me out of being focused on the price action and into greed mode, which always lands me in a hot spot.
- As a short seller my job is not to tell fortunes or predict things. In this line of business you’re not right until you’re right. What I mean is that you could have a perfect thesis and understanding of what’s going on, but if you jump in front of something before it’s ready, it doesn’t matter how right you are, because at that moment you are wrong. This means that I can build a thesis however I cannot be so tied to the thesis that I allow that to dissuade me from what’s currently happening in front of me. When a name is ready to roll over…it will roll over, and it will be glorious. Until then you can use your thesis to prepare yourself for the upcoming event, but don’t you dare try to be Ms. Cleo and tell the future because it will just get you burnt.
Context is key and That’s something that I have to keep in mind on these multi-day sector moves.
Now, on to the trades.
CIIC
I had some price alerts set and unfortunately missed the 15.74 crack, but took advantage of the price action afterwards in the channel. Things were a bit more turbulant than I cared for, so I locked it in and kept it move, and as you can see…it’s good that I did follow my gut.
FCEL
Here’s a good example of what I was talking about earlier in regards to the multi day mover. Had I just waited and let it settle down there was a KILLER trade to be had, but because I jumped the gun and was trying to do stuff on the front side (both inter and intra day) I pre-exhausted myself (I had one job Nate) on it. Lesson learned and time to apply this to the next one. NEXT
KNDI
This one is the ugly duckling of the day.
Now on the plus side I had a plan and I stuck to it for my entries, but on the down side my plan was questionable..lol. Again this is an example of getting ahead of myself on a ticker that’s a multi day sector play. I have to recognize this facts and respect the trend. Also I was actually up pretty nice on this one, but when I peaked at my P/L is when I got all mentally distracted and I let some nice gains go to waste and grind me out. I deserved that for losing focus. The name of the game is to trade well and not worry about $$$. The $$$ will come if you trade well, so while it’s tempting this is a new sticky note that I will be adding to my monitors as a reminder to not get distracted.
Key Takeaways
There are a ton of moving parts to this thing and it’s my job to look at all the pieces and start to put the puzzle together. There are levels to this thing. Much like when you were a kid and you started out with the 8 piece puzzle set, then when you could handle that you moved to the 40 piece, then 100 piece, then 1000, then 5000….well in trading I feel like it’s like that. You start being able to put together a puzzle with a few pieces, but then you graduate to the next level and realize that there are more pieces to this thing and so forth and so on.
To me this further solidifies the fact that you pretty much need to be in an endless pursuit of knowledge here and lucky for me, I like to learn.