I had better discipline this past week when it comes to how many trades I made. I only made four this past week. I also learned a new rule. It has to do with stocks crossing from under $1.00 to over $1.00. I don’t know for sure how concrete this rule is but I got burned twice by not following it. In my defense, I didn’t know about it before my trades. After learning of this (after my second loss) I started to notice this behavior with other stocks as well, so maybe there is something to it? I don’t know. My sample size is still pretty small, but I will be following it from now on. I list the rule below in my trades where I got burned.
December 23 was the last day of my 14-day free trial at Investor’s Underground. I did not renew the subscription. I plan on reviewing all my notes that I have from being in the chat for two weeks and reading the blog posts and websites some of the people in chat pointed me towards. I will be getting my Cy Group application finished this weekend and sent off. It is filled out, I just need to scan it into the computer (about 50 pages) and send it back to them. If they accept me into their program I’ll need to learn their platform as well. Once all that is up to speed, I’ll be renewing my IU chat subscription. That will probably happen around mid to late January.
The trades from last week are listed in alphabetical order.
AMKR – I bought this on a pre-market alert in IU’s chat Monday. I didn’t get in right away at the open and let it pull back first. I saw a little volume spike and bought some. The long term chart seemed to indicate resistance near $7.50, but if it could get through that, then $7.70 might be in the cards. Either way, with my small positions, I was looking to make a good trade rather than make a ton of money. I would have sold it on Monday when it couldn’t break $7.50, but didn’t want to use up a day trade so I held over night. It tried again on Tuesday for $7.50 twice but couldn’t get over $7.40. The second run at $7.40 ended so quickly that I couldn’t get out fast after enough on that big drop. When it stalled near $7.40, I got out. 3% gain and didn’t have to use a day trade.
CGEM – I bought this on Tuesday morning right at the open after overnight news with Pfizer. I had a good entry point right when the market opened at $4.91 and thought about selling when it hit $5.50, but I had the PDR over my head so I figured I’d try to hold it all day to save a day trade. So, another gain turns into another loss as I got out after it failed to maintain its sideways action late morning.
This was an interesting trade. After I bought there was a lot of chatter about whether it was a good buy or not. One person in particular kept making reference to it being a bad idea, etc. I asked him about his comments in a private message to him and we talked for a few about it. After hours, he (I don’t know if he was a man or woman actually so I’m using that gender generally speaking) spent about 90 minutes in a private chat with me talking about Bollinger Bands, 20 EMA, slow stochastics and how they help in spotting buy opportunities and short sale opportunities. I copied that entire chat session into a Word document to study later as well. It was very interesting and very helpful.
That was one thing I learned about chat in that two weeks. Everyone (at least those I spoke with) in there is really helpful and want to help teach others.
HLCS – This was bought on an IU alert. This is the second of the two $1.00 trades I made. It was shortly after I sold out of this trade that I learned the following rule. I learned that there’s an unwritten rule about stocks crossing the $1.00 mark. I don’t know the exact rule, but there seems to be a consensus that after a stock crosses $1.00 and makes 15% or so, it pulls back. I didn’t know that. I bought HLCS after it crossed $1.00 and as soon as I hit the buy button it pulled right back. I sold it after it couldn’t hold the slight consolidation between $1.05 and $1.08.
YRCW – This was mentioned on CNBC at about 10:30. I pulled up the chart and it was at $1.10. As volume increased I bought in looking for a slight run. However, by the time I found the guts to buy, I had bought at the top of the spike at $1.18. I held on for a little while, but it broke $1.12 and I sold. This was my first buy of a stock crossing $.99. HLCS was purchased about 20 minutes later and some time after that purchase of HLCS did I learn about this $.99 cross rule.
I started my experiment with a balance of $10,361.53 and that now stands at $9,273.58. That’s a loss of $1,087.95, -10.5%.
The Donger Trades 