09/28 – CRON impatience to patience

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. Click on the highlighted links for more details. For my main page, please click here: Day trading for beginners


 

Watch list for today was AMD (totally missed that dump),  TEVA (was excited for that break of $ 21.00) CRON (obviously my break and butter setup for now) and GERN (dump and pump? Sometimes counter trend works best!).

The day started of a bit funny. There were a good few stocks in play today, like IGC, TLRY, NBEV and a lot of other stocks jumping into the weed wagon. I am not much of a hype trader, but I always seem to find a ticker that piggy back rides on these hypes. When Bitcoin was hot, XNET was my player. Now that Marijuana is hot, CRON is my piggy.

The pattern is quit simple, Parabolic move and piggies following that ticker. What gets me though is that traders always over hype a thing. Greed is all it is, and as a beginner trader, you need to understand this too. Why is a stock going parabolic? MONEY, GREED, EXCITEMENT! Greed is part of the game. In other words, nicer words, you could call it a bias.

One of the hardest things you will face as a trader, is the fact that you will have a bias. Either short or long biased, you will look at pattern in a certain way. For me it is most definitely a short bias. As good as a ticker / pattern / chart looks, I know people will take their profit at one point (the smart money anyway). Dumb money will close their losing positions at some point too (I mean, 100M volume on something that is normally trading around 2M? There must be at least 80% dumb money, right?). They will use stop losses and cause them beautiful washes dumps.

Anyway, greed makes us biased as well. We WANT to see a certain pattern. My guess is that this is the exact reason we trade when FOMO alarms are going off (FOMO = Fear of Missing Out). We want to see that OUR pattern and trade OUR pattern! It is YOUR bread and butter pattern, so you NEED to trade this, right?

They big boys always trade their one pattern, over and over again. This is because they know this pattern for longer then most of us have been trading! And you see them lose too. Now you know why, right? Why do they lose? BECAUSE THEY HAVE THE SAME BIAS. Okay, most of them know what they are doing. But trading low float garbage has their risks too. Loads of risk. Low float is a stock that has a limited availability of shares that can be traded. This means, that (when there is higher demand) the price will go up quicker.

CRON

Beating a bias is just as difficult as controlling your emotions. We can also call bias an emotion. Even for the most experienced trader this is difficult.

CRON has been having the same pattern as the last few days. So, today I was not expecting any difference in her pattern. Spike, fail, spike and fail again. After the first failed spike, I was a bit too enthusiastic, I guess. I thought this was going red so I shorted the failed move from 11.33 – 11.20. But this bounced and stopped me out. Too bad, but paper cut losses are part of the process. Then she jumped to 11.40 and I was actually convinced this piggy was going to break out to 11.50 at least (dream trade would have been 11.50 to 10.50) She didn’t break out and I got in at $11.20, risking $11.30. Added some when VWAP failed. Exactly the same pattern as yesterday, where CRON failed $11.33, dropped and shot up to 11.47 and did an all day fade.

Where I was stopped out within minutes on my first trade, it took hours to get to my exit point (which was never reached!). As I was biased, I was sure she would crap all the way to $10.80. She might still. Kindly note here, $10.80, is a magical number. I notice stocks always have heavy support or resistance at that level! Anyway, I was expecting a crapper to that level from the beginning. CRON is doing the same thing as yesterday, but more range. For what it is worth, I shorted this stock when the range settled a bit. I am using 10 cent risk right now and with 7 cent range it is too dangerous to enter a stock.

What gave me more confidence in this trade is that CRON was doing lower highs. The basket ball lower highs confirmation. you can see here below what it looks like. As long as this pattern holds, I will hold. When she reverses, I will cover my short. It was that simple, actually!

BB analogy CRON - 20180928 Also, kindly notice how this ticker was absorbing dips. That did scare me a bit to be honest. Especially when she was crapping around $11.10. There were hidden buyers, that were not shown on level 2. They were soaking up dips. My bias, there we go again, was telling me: “as long as the trend is downwards, these hidden buyers would sell at one point”. My educated guess would have been $10.80. My guess is that this baby will crap, eventually, to 10.80 and drop like a magical ball, back to $7.50. We need to wait until the smart money is done with their games with TLRY, NBEV and IGC.

SERVICES THAT CAN HELP YOU

Trading large and mid caps is hot business. Tandem Trader offers some insight on how to trade them.

Kindly click the following link here for more info on Tandem Trader:

Tandem Trader DVD

Also, if you are interested in short selling, you should check out Trading Tickers, which contains two important strategies 1). shorting parabolic moves and 2). buying breakouts. You can find it by clicking the following link:

Trading Tickers

I hope you enjoyed this blog entry! As always, feel free to share this post!


If you are interested in Investors Underground and would like to learn more, please click the link here: Investors Underground.

 

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