For whatever reason I just can NOT shake my short bias off my mind!!!Today is supposely the day that I hit home run long & short. Big volatility and tons of liquidity in the market. Oil companies such as BTU already made ridiculous move yesterday so I just can't believe that it went even crazier on 3rd day. Remember market can remain irrational longer than you remain solvent!!!!
One conclusion that I can draw is: when trash company in the hot sector/industry and trading around HOD, you buy it with set risk!!!!! No question should be asked!!!! Remember that market is an evil bitch that often tricks you!!!! The big morning panic leads everyone think that finally these oil&energy companies start to crash then surprisingly BOOM it went towards HOD!!!That is a big big red flag for short sellers!!!!!! Whenever a big HOD push after big ass washout, short position must be closed aggressively!!!!!!!! Don't walk, RUN!!!!
-had strong conviction this thing will go down b/c even though foreign company takes stake in Brazilian airline company doesn't mean it will save it from bankrupting. Was down a lot when near HOD was formed but after observation it couldn't hold above it so I got a chance to cover.
SDRL is the most insane one which frankly we haven't seen it for a while. I remember in the past all the crazy runners are small cap and low float but man this one really fucked up all the shorts today!!! There are several times that I wanted to short but due to shares unavailable I didn't do anything. It kept going and going and there are twice that it demonstrated signs of cracking but both turned out to be disguised breakdown. Remember, trade what you see!!!!! Just believe this trash and large float company up 100% doesn't mean you must short it!!!!!!! Wait for the signs!!!! Wait till everyone got exhausted and said FUCK it Imma OUT! then started to size in!!!! Had I had shares to short I could easily got fucked just like everyone else.
Got inspired by a good trader in chatroom on buying for reversal idea so I started to working on that. The first one was success and closed my position with $200 profit. BUT the second one I got myself into a deep hole and at the peak I was down BIG-$600. One thing I noticed that is important for buying falling knife is you are not the ONLY one and market often tricks you to think it's starting to rebound but in seconds it pulled back down. You have to put yourself in the shoes of big short sellers and smart buyers. Ask yourself at what point normal people will start buying???? In this case rational people would think hey this thing went from $7 to $5 and it got hold above VWAP so 90% of people would buy it with stop loss near the VWAP. I had another picture in my mind. I think this thing will washout below the VWAP-$5 whole number mark and freaked out every dip buyers and ran back up and reclaimed above $5. I knew it but for whatever reasons I bought it toooooooo early and even after average down I got bad average. It is one of the occasions that you are dead on right, you saw the trick market played on everyone but didn't do the right thing!!!!
After closing my second position I went to have lunch. In hindsight should never took eyes off such ridiculous player!!!!!
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