-Left money on JRJC but I did the right thing, worried the former runner got crowded.
-Because I was up nicely so I became careless on my 3rd trade and I let my unrealized loss get way out of control. My original plan was playing $3.70 risk level because I could spot it on daily chart. I sized in early @$3.68 and that wasn't the problem. The problem was adding to my position instead of cutting my 1st position at risk level. Then instead of playing $3.70's risk I decided to play $4 risk level but again wrong!!! It blew over $4 and went straight towards $4.50. At that point I was holding 5300 shares with avg. $3.82 and down $3600 unrealized. I was feeling very uncomfirtable at the peak but luckily the pullback came and because holding full size at bad average and worried about secondary spike so I took nearly half of position off. It kept going down so I took the rest off b/c the bounce was due. At the end I walked away with $300 loss.
Lesson:
-The perceived resistance is NOT valid resistance unless the chart proves it.
-When the stock started spiking after the consolidation, do NOT underestimate its spikability!!! Wait for the signs of weakness to size in.
-Even though I knew and said this a million times, "always cut your position at risk level"!! but I didn't do it which led to my next mistake: adding position close to my initial entry price which doesn't change the average much so what's the point of adding???? The reason I added was I thought $4 was valid resistance so once again I traded on my assumption/opinion instead of what chart was telling me. This one was supposedly a killer trade but I screwed up and ended up taking loss. It went to low $3's later but I didn't regret my exit b/c it was mistake entering position in the very beginning and the average was bad so I decided to take it off and wait for next opportunity.
-I don't care whether make money or not at the end, $3600 unrealized at one point and risking blowup is NEVER a healthy trade!! please please please learn b/c next time it can go to $5, $6, even $10. Do not let one trade take you out of the game!
-I didn't traded it but the reason I posted it because there are tons of lessons out of it.
-was short biased from the get go but didn't short because the volume was thin the whole time- traded less than 1m shares before 2pm.
-Bao lost money on it so I believe lots of other big traders lost as well.
-As conclusion: thinly traded+SSR on is NEVER a short!!! always wait for the BIG surprising pop with huge volume to short into! Learn from it!
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