06/29 – TRXC crash ‘n fail

I started my day trading career with Tim Sykes and when I wanted to learn more, I joined Investors Underground. The DVD’s that helped me the most were Tim Grittani’s Trading Tickers and Nate Michaud’s Tandem Trader.  Software that has helped me in my early years was: Trade Ideas software. Now I use FINVIZ ELITE. Click on the highlighted links for more details. For my main page, please click here: Day trading for beginners

Watch list for Friday June 29, 2018: VVPR, TRXC, GERN, TXMD, VSTM, VKTX, ARQL, AXON, CLNE, all short biased.

CRASH OF THE DAY

I am a short biased trader. Long seems to have stopped working. The overall market is going side ways and, with a looming trade war between the United States of America and China, this outlook doesn’t seem to fade. My main driver, to check the overall market, is the SPY. 280.40 is the main resistance for now and the market is in an uptrend. However, there are many risks in the market right now too.

The stocks that were is play were VVPR, TRXC and GERN. ENPH is lagging behind, VKTX is keep up a bit. Although VKTX did have a bit of volume, it does not interest me because the price and the price action are not volatile enough.

GERN is way too slow and does not seem to budge.  She has plenty of room to move down, but I don’t see an edge right now. ENPH has a similar flavor as VKTX. Not enough space to actually move. Yeah, I could make 2% on this trade. Would be a decent gain too with a bit of size. However, ENPH is trending between support and resistance right now, so i avoid such a play. Mainly, because I trade of support and resistance.

TRXC

TRXC crash - 20162906

I am one of the few people who does not want to show his daily P&L, but see here. Received a few DM’s asking for it. So here you go!

Back to the important stuff. TRXC. TRXC is doing its TRXC thing as it has been doing all week. Crash, recover, breakout. Although the latter I do not see happening right now. I feel lucky to have had any borrows on this, because there weren’t any until something like 9:25AM-ish. They were gone by time this baby crashed to 4.50’s.

I have traded this stock all week. IMO three things could have happened. 1). An unfunded parabolic gap up to $6.35. My risk would have been $6.50. A magical number with some resistance to cover your losses. I would have lost something like 60 dollars. 2). more likely would have been a “push”or a “ramp” towards “5.50 – 6.00”. This did not seem likely, due to the fact that the down trend from yesterday continued. What did happen was a 3). failing support. 4.80 held a few times before so I knew, as soon as this number cracked, TRXC would crash like a charm. My risk would have been near red to green or, depending on the price action, near 5 dollars. Whole number work too to trade of off. However, many people do this so it can be a crowded entry!

I started my position at market open. This stock shoved upwards and was sold into that doji. I sized in, as I have done before, below VWAP. I waited, and waited and waited until the stock reversed. Covered a bit into that $4.45 to $4.25 washout and covered the rest into that second wash from $3.35 to $3.30.

3 strategies: Parabolic move, push ‘n fail and fail ‘n crash

I look for three thing to trade off. A parabolic move, which means that the stock moved to a resistance point way above the prior closing price. You cannot give an exact percentage what would be a perfect entry. In these cases, I wait for the momentum to shift and start my positions when people are selling into spikes.

My favorite move is the push and fail. This is when a ticker pushes or ramps to prior day’ support and fails. Keep in mind that 52 week highs are a risky trade! But they are perfect for second day push and fail moves.

This is a pattern I used to hate when I traded breakouts on the long side. I would have waited for that $5.00 to breakout at open and the monster would have crashed (as it did the day I traded this on the second day!). They crash like 20 to 40 cents easy. Also, keep in mind that there are a lot of people expecting a gap up too and will take profits when stocks go down. When you understand this, you have an edge in the market! This is what I trade from. They seem to take profits at resistance so I can short into these sell-offs.

The third pattern I trade, and this is the exact pattern I used today on TRXC, is the fail ‘n crash pattern. Support is so important! Although short sale restrictions complicate this setup a bit and the availability of borrows or shorts are scarce on this pattern, this is the most profitable pattern. The standard pattern is a weak open into nothing land, nowhere near resistance or prior day resistance. Then a sell-off from that current day high.

Gap players will sell as soon as a ticker goes green to red. They will sell at any support levels too. For this exact reason, I call stop losses stupid.

I usually start with a small position into any buying, which is sold into (not today, as this cannot be done with SSR!). I size in when the price is below VWAP. For some reason people always sell into spikes above VWAP and then the stocks just crash through VWAP. Use any spikes to short into and cover into follow up washes. It is that simple.. lol.

My ideal trade is a combination of the push and fail and fail and crash pattern. I usually go all-in with these type of moves and cash in big. They are rare, but work. Risky too, because you can give back your gains! This means that the price of a stock gaps up and fails prior day’ resistance. Then fails prior day’ support (or better an important key support level). After this has happened, a stock will crash and panic. I cover my position into any follow up washes or spikes for decent gains.

So these are my three setups that work for me now. Keep in mind I look at the bigger picture and short, based on bigger picture moves. I do not have a huge account either. I am just an average Joe, trading independently.

Feel free to share this post. If you found me via Twitter, please follow me. Also, I am curious about setups interest you and why. Leave a comment in the Twitter thread so I can read it too. Thank you!


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