Don't pay dollar to keep 2 cents when wrong. Cut your losses quickly. Trade what you see, not what you think.
Joined Oct 26, 2011
719 Blog Posts

To chase or not to chase?

Despite a negative DOW, there are a lot of short squeeze happening all around. The Fly and his team are raking in gain left and right.

However you need to be fast and nimble to take advantage of these momentum plays.  If you are, chasing can be rewarding if you are early in the game; otherwise, quick gain can become quick loss when you are not looking.

If you want to chase but is not so nimble, I suggest you use a stop based on intra-day low for protection.

For myself, I bought $CERS, $KERX, $MNKD, and $CUR at higher price which definitely fell into the category of “chasing”.  I picked these because the charts looked good for further breakout.  But I’m also aware of the need to be quick on cutting losses here.

For my $SZYM trade, truth be told.  I was shaken out of my $SZYM early in the morning for wanting to lock in my gain.  Based on the turn of event later in the morning (hindsight), it is safe to say that the short was getting nervous and embarked on a short campaign to drive the price lower which stopped me out.  But the downdraft was short-lived.  Buyers began to come back and drove the price back up which caused the shorts to cover en masse.  I bought back some at the low $10.xx but not enough to partake on the great momentum later in the morning.  I was away from my desk!  Later, I chased the price by buying on breakout of the intra-day high @ $10.7x.  Priced proceeded to head higher to $11.00 and I added a bit more.  Unfortunately, all good things don’t last for too long.  Price began to fall and I moved my stop quickly to lock in gain for 50% of the buy-back shares.  I was stopped out later.  As price continued to decline, I sold another layer for breakeven to bring me back to starter position.

So far, the chase on $SZYM had brought me a small gain which I considered a waste effort.  Yes, if I had held on to my original position from the morning, I would have made a lot more; but I learned not to think like that anymore.  Once I was out from my early shake-out, $SZYM became a new play with its own risk profile for my re-entry.   You can’t let the “coulda, shoulda” affect you as a trader; otherwise, you can paralyze yourself with remorse and self-criticism that you may end up not trusting yourself in the future.

As a trader, you MUST learn to trust yourself regardless of past decisions you made.  The market is hugely volatile and will take no prisoner.   So, accept your decision and move on.

So far, my chase on the above named stocks have been neutral at best.

There you have it.  If you are thinking that you are missing the boat by not chasing, you can rest easily that it is not the case here.

Be careful out there!

My 2 cents.

If you enjoy the content at iBankCoin, please follow us on Twitter