-the day started with AVXL up nearly 20% premarket and solid trend. Due to the strength of premarket, I was thinking is it going to be like SPHS.
-so here is my plan: short into strength in "amateur hour" and cover into the pullback if trend holds or hold it through the day if it continue fading.
-I never thought that it could be a crowded stock for couple reasons: it was at $15 a few days ago, a bad company everyone knows of and there could be a big short interest already
-however I don't regret my short. I will do the same thing again.
Here are the real problems:
-overstayed the short position and when it started to gear up, instead of cutting my position and eating the loss, I added to the LOSER which compounded the loss and reinforced my short bias.
-I overlooked the big picture trend, was too stubborn and focusing on intra-minute candles. the lack of big picture is my 2nd mistake.
-Made lots of emotional trades, in and out which piled up my trading cost. That's NOT the major problem, I don't mind $100, $200 cost if I can potentially make $1k,2k. The major problem is because of in and out, in and out, I became exhausted. My head was spinning, My back is suffering pain and I was feeling unease through out my whole body. For no good reason or whatsoever, I decided to stand up and fight.
-2 things=NEVER SHORT: 1)after the market open, it made the first push then pullback.You have to pay attention to secondary push, see if it can make a new high or even close to the previous high, it doesn't have to base on the first high! 2)after the secondary push, see where it will pushback, is it going to make a lower low or higher low. If 2nd high>1st high & 2nd low>1st low=NEVER SHORT.
Does not necessarily mean to buy right away, wait for higher low, higher low and long. then after it breakout the HOD, add to long position
-The ONLY right thing I did was cutting my entire short position after HOD breakout and took a long position.
-deadly spiral continued..I thought it was "stuffing"so I shorted it but when it started to gear up instead of cover my entire position, I did wrong thing by adding to my short, now I was having full size.
-Again I was just being too biased and didn't follow my trade plan. I traded on what I think not on what I see. When I am in full size position, I refuse to realize the loss....that's the major problem. never in full size because I know that I will be frozen when I need to exit.
-whenever I refused to stick to the plan,there was consequence. I held it through the big ass squeeze. I got lucky this time that it eventually went down but didn't even think about to cover. I thought finally momentum has shifted, i may hold it o/n but guess what WRONG AGAIN. instead of fizzling down, It spiked again. I reached the point that had to liquidate my position by 3:30pm because ST only allows 2:1 margin o/n.
-I did hold a small position planning to swing on but that was when I saw KBIO made ridiculous move and based on my experience last time when AQXP up triple digit % last time, VLTC spiked. So due to the concern that AVXL can be sympathy player to KBIO, I covered that that turned out to be the BEST cover of all day. It saved me from more than $1k loss the next morning.
-gladly I covered the previous day in a/h. I saw AVXL made ridiculous move premarket, so here is my plan: shorting into morning strength risking premarket high, I had $6.80 avg and work out nicely
-I thought finally...it will go into dark abyss but again WRONG. the secondary spike turned my $1.2k profit into nearly b/e but I didn't get shaken out. I was planning to cover into the next pullback if it starts to base higher.
-As what it shows, I covered into higher base afraid of EOD HOD push for half of earlier profit.
-here is P&L at the end of day. A ridiculous roller coaster ride. first of all I was down $1800 on short realized, then I made nearly $2000 long realized which net me $200 profit, and then I reshorted and ended up killed but refused to cover into the squeeze but still covered at the end due to the staying power and KBIO's craziness. At the end after commission and ECN fee, I took $300 loss which is much smaller than my earlier loss but I was extremely tired, exhausted and suffering from headache, stomachache, coldness. It was not a good experience. Traded the way I did, doesn't matter whether make some or lose some, it's just not worthy it!!!
-KBIO is near a bankrupt company and recently it came out a press release about it will liquidate its assets and very likely to discontinue its operation. I didn't know much about the fundamental part of it, but I knew there were lots of people on Twitter taking short position including lx21, mt, etc. lx21 is an influencial trader and recently he just added KBIO on his blog-"90%trade" as part of his short holding at avg. $2.20. I can tell there are lots and lots of people are short biased. Above is the 3 day chart. After liquidation news, it was down to $0.50 but ran all the way up to $2.50 and was getting crowded. tons and tons of shorts were taken place. Then A/H.....BOOM!~~
-I was actually watching it when it was quickly shooting up to $3.00. On the hindsight yes I should have bought it but at that moment, it was ridiculously crazy!!!! I was watching it went from $2.00 to $3.00 in 3 1-minute candles!!! a 50% spike in 3 minutes!!!!! that's the momentum you need to join!!!!!! unfortunately I didn't make it as part of the plan. I told myself to be absolute contrarian!!! knowing a stock is ridiculously short biased and I know that I should have been long biased!!! but I need 3 things: volatility, volume, and PR!! always remember volume is the top indicator to watch!!!!!!! it supersedes everything!!!! a PR came out at 5pm when it was already trading in the 10's.
-Had I prepared, I think I should have nailed it.
-A/H's movement is absolutely ridiculous. Then in premarket it did 2nd round of spike and here i believe there are lots of shorts started jumping on board and all the shorts had been covered already. at that point, I didn't touch it but I do think it was probably the beginning of the back side....
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