This was the email I sent to TIMalert subscribers the other day:

Bought 4000 HRZ at $4, Earnings Turnaround…this shipper reported a surprise profit, is cutting costs, doing everything right, just as the Reuters article that will be read/promoted all weekend says…2 million shares short, trading ridiculously cheap valuation, lots of bottom pickers gonna think this is the bottom, careful it’s already up 35%+ today, resistance at $4.23, my entry isn’t event hat good, but with this one, i don’t think i have to be perfect, wouldn’t be surprised if it wavers in the $3.80-$3.90 range rest of the day, but I think it gaps up nicely/performs well early next week…told you i buy stocks, just need the proper setup!

…gave a few hours, but it failed to break $4–after much trying–so I exited saying:

Sold 4000 HRZ at $3.85, i don’t like how it can’t break $4 added to the overall market accelerating its sell off and CNBC news that the “bad bank”plan might be dead…not worth the risk of being long over the weekend with the overall market hanging on by a thread, technically-wise…so much for my first buy, annoying $600 loss, flat on the month, not risking bigger loss with imperfect pattern…watching SKYT and PSTI for potential shorts late today or Monday

When see the full 5-day chart here:

…you understand that while I was right about their earnings being a lasting catalyst, I entered before it proved it could break the key $4 resistance.

As it surged 10%, to $4.40, inside of an hour of breaking this key resistance yesterday, enriching several TIMalert subscribers who saw my premarket post yesterday:

HRZ closed right at the key $4 resistance, making me feel better about
buying the other day…this thing is still an earnings turnaround, if it can
break $4 and take out resistance at $4.2, I still think it can really surge
to the $5s or even $6s pretty soon…be careful of fakeouts, but methinks the
chart will resemble another undervalued good company earnings breakout VPRT,
potential buy

Check out the chart of VPRT, it’s exactly how this HRZ is playing out…

You see there’s not just one entrance point on these things, just like there’s no one right entrance point ont he stocks I short, which is why PennyStocking will become a lot more popular than most people believe…the key is knowing when to get in and when to get out.

I was dead wrong on my entry so I cut my losses very quickly, as did several TIMalert subscribers below (some banked by entering perfectly or even betting the other way, which is fine, more power to you!):

and made an extra $19 shorting on the TIMalert sell. +$232 overall. -Reaper

Got in at 3.8699, got out at 3.69 for a $170ish loss on 1000 shares…boo… -JeffMoates

…while it’s not the end of the world to be dead wrong–it’s a little undisciplined, but nobody’s perfect–it is bad not to cut losses quickly when you are wrong which is why when people ask me when I cut my losses–is it 5, 6, 8%, I say no, I cut losses IMMEDIATELY when a stock doesn’t act the way I think it will…by the time I get my execution on my volatile little penny stocks, it’s usually a loss–or a gain in some cases–of a few percent, aka a scratch.

Look at all my trades over the past year and watch my instructional trading DVDs and you’ll see scratches aren’t the things that make or break my 200% annual returns, they’re just what prevent me from disastrous losses that hurt my chances, and yours, at achieving such mind numbing performance.

Welcome to real trading, taking small losses is something EVERY SUCCESSFUL TRADER MUST DO.

Tags: Bad Trades