Why bother detailing a $12 loss? Because every trade matters, the good, the bad and the scratches. Important lessons are everywhere…
Shorting 400 COIN at $8.78 right before the market close on Wednesday turned out to be a good idea. I shorted because the stock was breaking down over multiple time frames, intraday, multi-day and multi-week, failing to hold keep support at $9 that I’d expected to put up more of a fight. And the daily wall of sellers have entered. Oh yeah and the company is a true POS—no pumpers or Garty the faux guru—can change that. Only problem was I had a Thursday morning meeting so it’d have to tank quickly or I’d have to risk it while I was away from the computer.
Since TIM is so tiny (must protect every $ to get the magical $25k SEC freedom hump), I’ve never used stop losses and COIN is known for squeezing shorts, holding was out of the question. In after-hours action Wednesday night, I tried taking a $100ish gain at $8.51, but discovered Thinkorswim closes after-hours action at 6:30pm. Wasn’t that pissed until the next day when the stock gapped higher to the low $9s.
But even with 20 minutes to go before my meeting, I still held since the gap looked shaky…3 minutes later, the stock was unchanged back at $8.72 x $8.80…good decision to guess the downtrending would remain in place…I waited a few more minutes but the buyers held $8.70 well, so it was a possible bottom…running out the door, I covered my shares at the exact same price I shorted, $8.78…losing $12 due to commissions.
One hour later, I got back to find the stock down to $8!?!?!?!?! Probable wall of sellers entered, gradually pushing those determined buyers outta there. Early exit as usual, pisses me off, but it’s a great lesson:
TIM Lesson: To maximize your trading gains, never schedule intraday meetings
No coulda woulda shoulda here, my meeting yielded about 10x what I mighta made on this trade, such is the reality of a publisher / trader not a trader /publisher. More importantly for you, this drop was predictable. Especially when you see it went from $8.50 to $below $8 on huge volume in less than 5 minutes—can you say stop losses getting taken out? Classic classic classic Supernova pattern breakdown. Where the bottom is, nobody knows. Wouldn’t be surprised to see the stock below $5-6 in a few weeks, but I’m not betting on it—not with my portfolio so small—spike risk galore…You’ll see as my portfolio increase and I have some cash to spare, only then will I take on some longer term shorts…
Posted in 101bad, Bad Trades, Short Selling, Supernovas, TIM Lessons