I woke up a little late today so when I sit in front of the market and I couldn't believe what I saw-DRYS's already above $90's and I went to the bathroom and came back and saw it at $100ish before the halt. SEC requested more information about the company and all the sector players cracked!!! Then I started to think finally!!! The halt must have killed the entire sector and all the other shippers. So I started shorting SINO and DCIX premarket. These two were the strongest of all. I don't regret my short. Shorting them is not the problem.
The problem was I didn't think about the stop out point. I was convinced and strongly and perhaps stubbornly believed DRYS's halt would bring down the entire sector. So I ended up adding at higher level which is essentially adding to loser. Afraid of missing out. Afraid that when DRYS opened it would be at many point downs and these players would snap fast. Again I was trading on what I think, not what I see. The second mistake was I held large position into the open and got squeezed to the moon!!!! I remember I even told myself to cover all position by the market open but I didn't stick to the plan. Here comes the 3rd mistake: they got huge volume when opened and they snapped BUT hugging around the VWAP and that should be a huge red flag!!!!!! I didn't downsize tho and kept holding large position and finally they took off because I saw "relative volume" but the loss was already snowballed. I had to take them and I am glad I took them b/c I would blowup my account if I didn't cover them. DCIX just went fucking rampage!!!!!!
2 things I did right: 1) Realized I was wrong and gave the uttermost respect to "relative volume" red flag and covered all. 2)When DCIX went nuts and SINO was holding above VWAP the whole time and already traded nearly 20million shares I emailed Ryan to change my account setting($20,000 max loss restriction) and I went long BIG SINO with $4.50ish average. I knew it's got very high chance to take off. I sold half near the top and the other half into the pull and decided to reassess.
Here is the PnL before 12pm!!!! Absolutely ridiculous and insane!!!!!!!!
I went to have lunch but couldn't take eyes off them!! Frankly I didn't know for sure which way they would go. So I kept watching and looking for the signs. Both of them started showing weakness in midday and the previous support got tested at 1pm so I decided to short them into pops and look for post 2:30pm unwind. I ended up having 2000 shares DCIX with $16.50 avg. and more than 10k shares SINO as it approached down the support level and looked like about to fall off the cliff. Glad DCIX worked out but SINO did classic "crack then grind" action and pushed all the way back. It went up another 10% afterhours. Due to abnormal volume I covered all SINO at $6.20. Was up $6k at $5.300ish but didn't take single share off. Was thinking that SINO would follow all the other shippers' track. The crack is delayed. WRONG!!!! As Nate said in the chatroom, SINO's got relative strength and it traded 40million shares today. I knew huge volume is always a red flag to short but trying to be patient, trying to give it time due to my good average. Ended up turning winner into breakeven.
Tomorrow: RULE
#1: It's okay to trade premarket but never hold single share into open!!! Long & Short!!
#2: stick to the plan: timing, position size, entry, exit!!! Think of all the possibilities
#3: be a step late!!!! Rather miss than early!!!!!!!!
#4: when setup diverges from the plan:price/volume, RUN, DON"T WALK!!!!!!! Get out before herd does!!!!!!!!!
No comments:
Post a Comment