Stock Trading Lessons Galore, Step Right Up And See The Amazing Asininity

Tags: AOL, TIM Lessons

TIM $14,010, Down $235 on the Day.

Wow, what a day. The good news is my latest AOL article on Apple seems to piss a few people off! The bad news: just when you think you’re ready to start rocking, the losses come knocking. All you can do is try your best to control them and write about it on your blog because nobody else has the guts to.

Started the day selling my (NASDAQ: FRPT) right near the open at $5.20, a pathetic 5 cent gain – which was an okay exit as the stock quickly went up to $5.35, but then fell below $5 for most of the day. Not buying (NASDAQ: SYNA) for the gap up turned out to be a good idea as the stock gapped down $1, maybe because people expected news. Surprisingly, the best gap up play of the bunch turned out to be little ‘ole (NASDAQ: DIGA), which gapped 7 cents to 70 cents, which would have been perfect for a nice 5,000 share block or $350 in profits. But you take chances and for all I new, FRPT would have gapped up 30 cents and been a nice gainer (it had the same kind of close the nday before as DIGA).

So, after being up $40 on the day, I watched and waited. (NASDAQ: AKNS) broke $12 nicely, just as I said to be on the lookout for yesterday – and went nearly straight to $15 by 11am. That was definitely the play du jour and I completely missed it. Sure, I placed my buy order at $12, but it cracked it too quick and like a little bitch, I got scared (especially since it hung around there for 10 minutes or so). Happily, my readers had no such problems as they posted these comments:

“Bought 2k at 11.32 yesterday afternoon. Sold 1k 14.50 and 1k at 14.78. I owe it all to TIM!”

“AKNS. in @12.45 out at 14.81. Just paid for your book X 72 ( the new rule of 72) Thank you.”

Glad I can be of service. For all you curious cats, while my book explains how I trade these types of setups, my DVD really details them extensively, which I believe is much more useful, especially considering you can all see how frequently I screw them up!

So, now I’m feel pretty glum, between DIGA and AKNS, there was an easy $500-$700 (assuming a 300 share position on AKNS, holding for 80 cents to $1. And, then I made a very common trading mistake – felt as I had to come away with a profit for the day.

I’d been watching (NASDAQ: SOLF) all morning and despite it making a new high and another contract, I thought I smelled weakness. Right after 1pm, I shorted 100 shares at $38.45 as it cracked the late morning lows. After nearly an hour, I was down 20 cents or so and the solars eleven looked to be getting stronger. I covered my short for a 9 cent loss and said to myself, c’mon man, what are you doing? 100 shares? What are you gonna have the patience to make $80? You gotta focus more on the DIGA-like plays where you can make $300+ on a 7 cent move! Point taken.

Just then, FRPT came out with a $99 million contract news and then began spiking. From under $5 Wow, this could be a big mover, I bought 500 shares at $5.21, c’mon $5.50 – I’d get to that $150 daily profit mark, oh yes I would. Nope, it wasn’t a new contract, it was FRPT paying to manufacture their crappy vehicles. Sold 500 shares at $5.19, a waste of yet another day trade.

2 day trades, combined losses of $45, including commissions. I was now down $10 or so on the day. What a complete joke. Within minutes, I knew what I had to do.

Fellow alternative energy play (NASDAQ: HOKU) was breaking out to one month, no wait, 6-month, no wait, all-time highs breaking $14.55!!! This was my chance. This was the next AKNS. I mustn’t be afraid to buy on strength, this is AKNS part deux. I bought 300 shares at $14.68 and watched, paralyzed with excitement, as the strength overwhelmed those stubborn sellers, taking it up to $14.88 within minutes. Woo hooo $50 profit on the day!!!

And then the solars turned.

My scooby sense that warned me on SOLF now hurt me on HOKU as all the solar plays turned in unison just like the panels they produce. SOLF dropped $2.5 from where I shorted (and covered?!?!), AKNS dropped $1 and so HOKU dropped 75 cents too. I swore, I got angry, but I could blame nobody but myself. I took my 70 cent loss – using up my last available day trade (for the next 3 days?!?!?!) and sucked up the loss. Sure, it could’ve bounced into the close, but I wasn’t going to chance it.

I actually ended up taking home 500 shares of (NYSE: NG) at $10.41 because it had great news, a solid base, a nice daily gain, lots of shorts and had made a new after-plunge high. And it’s a gold (hot hot hot ) play. All bodes well for a 20-30 cent gap tomorrow, which would give me a profit of $100-$150, helping to ease the pain of today’s $235 loss.

So, today was painful. Lots of good opportunities, all screwed up by me and yet my losses weren’t that bad. What can we learn from all this:

TIM Lessons:

• Buy high volume breakouts like AKNS in the morning, but not early afternoon. (Shorts panic early, regroup later and there’s not much protection from fakeout breakouts later in the day, unless you buy right before the close).
• Never feel like the market owes you any profits, no matter how right some of your calls are.
• If you think you know what you’re doing, write; help others profit even if you suck at it.
• Don’t waste precious day trades if the upside isn’t there, fi you’re poor with under $25k. Otherwise, you’re free, enjoy it!
• Solar plays, like any hot industry, move together, but just because one is breaking out, doesn’t mean another will.
• Take your losses quickly, even when you totally screw up, it won’t take much to make it back.
• Dealbreaker rocks (see their post bout me today)

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