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

Lessons from the past regarding Position Trade

Some of you may wonder why I’m so stubborn on my $AMRN trade and have chosen to sit through an ugly downtrend instead of abiding by my own discipline of cutting my loss and buying them back cheap.

Well, there is a reason why I call this a “position trade” from the get go.  Remember, I made that decision at the time I decided to load up (averaging up) when I was still in-the-money on the trade.

From the past, I had made similar calls to some of the stocks I believed to be “game-changer” or “visionary” but without the kind of conviction I’ve right now with $AMRN; thus, I loaded up BIG but sold too soon and missed the whole “game-changer” and “visionary” uptrend because I was either too busy or waiting for a retracement that I forgot to follow-through.  So, this time, I said to myself, “I’m not going to make the same mistake with $AMRN.”

Below were the trades I left quite some money on the table:

1) Loaded up on $SNFT (before they changed their name to $NUAN) because I believed their voice recognition software was a key component of technology trend at the time.  My average price was around $3.xx and price gyrating between $2.xx and $7.xx for a long long time and it began to wear me out.  Finally price went back up to high $7 and I threw in the towel by selling all my shares at mid-$7 because I didn’t want to go through the pain of watching it falling back below $7 which I had witnessed so many times.  Price then proceeded to head higher after I sold.  I was too “yellow belly” to buy back at $8 because I didn’t want to give back my gain after a long-period of frustration.  $NUAN is now trading at $20.00.

2) Loaded up on $LNG when it was trading at $3.xx.  At the time, I believed in this stock and its fundamental so much that I literally had a large stake on this one.  I had about 13% of my portfolio betting on this stock and I told myself I would hold this one long-term.  Price shot up to $6 and promptly fell back to $4.  The volatility was insane!  Instead of sticking to my conviction, I sold out when price went back to $5.00 for a decent profit.  While price continued to spike up and down in great speed either way, I lost my appetite after swing-trading $LNG for some quick profit here and there.   $LNG is now trading at $26.00.

3) Loaded up on $BIDU when it was trading at $110.00 before the split.  It was during one of those anti-BIDU sentiment and $BIDU dropped in price from high $300.00 to low $100.00.  Because my conviction wasn’t there, I sold at $130.00 and forgot about the stock.  $BIDU is now trading at $86.12 after split (pre-split would be $861.20).

4) Loaded up on $AMRN when it was trading at $3.xx.  After it went to $7.00, I got nervous and sold it for profit.  Since then, I began to swing trading it for profit.  Then one day, it so happened I did not have any position at the time, $AMRN gapped up to $16.xx and headed to $19.xx before heading back down.  I knew I would have sold it b/w $16.xx and $19.xx if I had held my full-size position.

Now, if I don’t learn from the lessons above, it will be all for naught.  So I told myself that, this time, I’m not going to let this volatility on $AMRN get the best of me.  Therefore, I’m holding this one through the end.  The one thing that allows me to hold this one through thick and thin is that I did not average down along the way.  I set my worst case loss scenario at my original investment (I doubt I will lose the whole thing since they do have a patent on pure EPA (icosapent ethyl); thus, I’m not faded by current $AMRN downdraft.

One more thing, because I made money back then with $AMRN when I loaded up with more shares than I’m holding now, this drawdown is simply my paper loss against my previous realized gain.  This fact does ease my mind in a way giving the current price of $AMRN is in a deep malaise.

Remember folk, this is strictly for position trade, I hold no such tolerance and conviction when it comes to my swing trades.  Swing trade is strictly for profit-taking when you see it.  Since the position size is much smaller, missing the runners here and there is part of the game.

My current position trades are: $LRAD, $AMRN, $SZYM, & $TINY and I intend to hold these as long as their technological fundamentals remain intact.

My 2 cents.

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  1. Monte Burns

    Not sure I have faith in this one. It doesn’t seem to be selling well, insider selling ect. I suppose the data isn’t anywhere near conclusive on sales yet though, best of luck to you.

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    • Zenhunter

      Without the marketing power of giant pharmaceutical company, to expect a great sales number after two months is unrealistic. We are experiencing the “no faith” sentimental right now; but I believe that at time passes, the tide may turn. Just take a look at the historical volatility of $LNG. Thanks for the well wish.


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  2. Bob

    Hello, IDK how this site works, or if you reply will be to my email(I hope)…I read this post and LOL (w/you) because been there and done that. Reason or my intrest is in AMRN. I was looking for you to talk to your use of it but it not show up here. You said you were taking it (if I understood link right) and I was very interested in how it was working for you. I also have swing & day traded this for great profits & hold a long that is mostly all from that….And I have been wanting to bite LNG just waiting for a good entry/pull back closer to $20…if it will return to that level, but I not convinced enough to swing a short on it…yet ha ha…ok thats all, looking forward to your reply

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