03/08/19 – TROV, a tough cookie

I Started my day trading career with Tim Sykes, where I learned the basics of high risk day trading. When I wanted to learn more, I joined Investors Underground. They opened my eyes to new setups and gave me a wider scope of the markets. The DVD’s that helped me the most were Tim Grittani’s Trading Tickers and Nate Michaud’s Tandem Trader.  I use FINVIZ to scan for stocks for my daily watch list. Click on the highlighted links for more details. For my main page, please click here: Day trading for beginners


 

I finally find something interesting to blog about. Blogging isn’t as easy as it might seem. What do you want to write about? Support/resistance? Risk Management? The daily hot runners? Setups I trade? Everything has changed so much since my last blog post that I can’t even compare it anymore.

There are a few things that haven’t changed. I still use FINVIZ to scan stocks. You can find my settings by clicking here: awesome Finviz scanner. The basic idea behind this, is to find liquid stocks that are up on the day. There are three intra-day setups I look for at the open and one setup in the after noon / 12am – to 3pm.

At the open I look for washout long setups, parabolic short (the exact opposite of a washout long) and a bounce short. The latter is a simple, but powerful setup. I just tweeted that this was my least favorite setup, but now it is my favorite setup. But this depends on the float. With thin names, this setup can go mental IMO when a stock is testing red to green. Later in the day I look for bounces towards prior resistance. The basic idea here is to short into a bounce and risking off red/green or previous day close. With a 70% probability, this is a worthy setup to track.

so yesterday, March 7, 2019 i was lucky on a late day fade. ALT was up 70% on the day and this was too good to be true. I knew this name likes to do offerings, so I was sure that ALT would crap eventually. Unfortunately I couldn’t get any real size on this and covered my short when she bounced of VWAP. That was a nice move none the less and I made well over 6% on two trades. Quite happy with that!

FWIW, I avoided BPTH completely. Not a float to mess with. I am happy for the once whom have profited from this ticker and pray for the once that were squeezed out of their accounts. May the trading gods give you another chance!

Anyway, the main topic i am trying to portray here, if that is the correct name for it, is TROV. This was a difficult name to trade in my opinion. The spread was roughly 10 to 20 cents on a USD 6 to USD 7 (and even USD 9) name. Also, this ticker seems to follow trend, rather then testing resistance or support, TROV just ramps up or ramps down, with a bit of cascading (which triggers massive FOMO!). So if you miss your entry (and mind you me, I am very careful when placing entries!) you miss your chance. Because, and I knew this, if TROV runs up again, there is a big chance of a squeeze (fabled to have only 3m float, with a 40% short interest). So, with this in mind, you cannot just smoke the bids. That would be an instant 10 to 20 cent per share loss, with a chance of blasting your account. Limit orders on the ask were not met, so you have no chance of conservatively trade this ticker. And with no real resistance on the chart (other then USD 9.60 from the open tick), in hind sight, this ticker was a hard gamble. I was just saying this on twitter, but if I didn’t covered my short at 7.15 (actual cover price 7.11, lucky me because I exited via a market order) I would have been squeezed out of, almost, USD 2.00 per share. I might have a small account, but having to deal with a 2 dollar per share loss would have been a good chunk out of my small account.

So point I can give here are the following:

  1. Risk management is so important! I use tight stops. Do I get faked out, yes. But it saves you from account blowing moves as seen on ALT, TROV and master account blower BPTH.
  2. Don’t market (using market orders) into positions or smoke the bid. I can honestly say that that it is okay to exit a position via a market order, because you might miss your exit signal (using a limit order) and waiting for it to hit that again is a huge risk (unless you have balls of steel. By all means, use limit orders). Especially with thin names like ALT, TROV and BPTH. With size this is a different ball game completely. With larger sizes you really need to analyze your best entry and exit prices. Every 10,000 shares can make a ticker move. and you cannot just market out of a position, unless there is enough bids or ask to cover your order. So if you have 50,000 shares you need to be extra careful not to give back your gains just trying to get out of a position.
  3. Using limit orders on wide spreads can be rewarding too. because if you place your trades right, you could be up as much as well. So when I short, and this is different from last time I made a blog, I short with a limit order. Do I miss my entries sometimes, yes. But I do have that extra wiggle room and trading thin names, with wide spreads, can be managed a lot saver. Because if I smoke a bid, with a 10 cent spread, I am instantly down 10 cents per share! I flipped that thing around. Now, with wide spreads, I am up as much too.
  4. Don’t trade with too much size. This market is not a market to use large size on. I halved my size, because the market was eating my account for lunch. No joke. CRON got me good the other day. My mistake here was that I was still trading this like it was still a USD 10 dollar stock, but in fact it was a USD 20 dollar stock, eating short sheep for breakfast.

 

SERVICES THAT CAN HELP YOU

For 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.

  • kindly note here that this should not be treated as advice, trade advice or any of the sort. Always trade your own plan, cut losses quickly and never follow any alerts. Always do your own research!

 

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