September 2017 – Monthly Summary

September 2017 Daily Summary

Took a hiatus from trading:

  • Japan trip first two weeks of September
  • Busy few weeks in the office shortly after

 

 

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July 2017 – Monthly Summary

  • Down on the month by (46.83%)
  • On 6/30/17 started with $2,934.42, as of 7/30/17 @ $1,560.10
  • Five trades, total realized P/L: $(1,369.07)
    • AEZS +$10.98
    • ATHX $(13.02)
    • CERU / DARE $(1,433.92)
    • MSDI +$57.83
    • VSTM: + $9.06

NAV July 2017Trades July 2017

Takeaways:

  • Don’t bet on a comeback from a conference call
  • Don’t bet on a comeback after a reverse stock split, ESPECIALLY when the firm in question received notice from the NASDAQ about keeping their stock above $1
  • Don’t fall for confirmation bias more than once, I found myself searching the web / news / stocktwits / seeking alpha / etc. looking for something to confirm that this stock was going to make a come back and that I would be rewarded for holding and hoping.  I was looking for Ovaprene (flagship drug that DARE is developing) to be a game changer, but their game plan is far out, two years – not now.
  • Don’t fall for wanting to be right over making money.  I was wrong, I should have cut my losses as soon as my mental stop was hit.
  • Respect your max loss for each trade.  Focus on minimizing the downside, the upside will take care of itself.  Instead of focusing on the amount of money you can make from a trade, focus on what is the MOST you can risk losing.
  • Trading without a system, is asking for disaster.  Focus on three things:
    • Trading Methodology
    • Money Management Technique
    • Best Markets for Setup

Books Read YTD

  • Mastering the Trade – John F. Carter
  • Reminiscences of a Stock Operator – Edwin Lefevre
  • Unshakeable – Tony Robbins
  • The Disciplined Trader – Mark Douglas (half way through currently)

Net Worth Update

  • 5/14/17: $30,000
  • 7/30/17: $40,000

First Significant Loss – $(1,426), 50% of Account

$(1,426) realized loss on DARE (before reverse stock split, CERU)

  1. Entry: BOT 2000 Shares @ 1.14 average fill price
  2. 10:1 Reverse Stock Split (CERU -> DARE)
  3. Exit: SLD 200 Shares @ 4.29 average fill price

Account size halved from ~$3,000 to ~$1,500.

CERU_7_26_17_chartsDARE_7_26_17_chart

High Level: Dragged out, hope filled disappointment.  The silver lining is that this is an experience I can learn from and the loss is bearable, I’m only trading with what I can lose – with what I can psychologically handle.

Strategy: Initially, buy the breakout on good news and exit at target.  What actually happened: Hold, hope, hold the bags & suffer till you can’t take it anymore.  From what I’ve read … classic new trader behavior.

Exit description: I sold my 200 shares of DARE earlier this morning because I finally realized how ridiculous my reasons were for holding.  From the very beginning I was stubborn and wanted to be right instead of seeing what was in front of me, a clear pump and dump that I should have left at first sign of declining volume and flattening price action.  I was greedy.  I didn’t want to realize a loss at $200, but my total loss could be $200 and not $1,500.  On the flip side, I am thankful that this was a $1,500 loss, not $15,000 or $150,000.  This is tuition, this is education, I need these losses to learn what not to do.

A few more takeaways from this trade:

  1. Don’t bet on a comeback from a conference call
  2. Don’t bet on a comeback after a reverse stock split, ESPECIALLY when the firm in question received notice from the NASDAQ about keeping their stock above $1
  3. Don’t fall for confirmation bias more than once, I found myself searching the web / news / stocktwits / seeking alpha / etc. looking for something to confirm that this stock was going to make a come back and that I would be rewarded for holding and hoping.  I was looking for Ovaprene (flagship drug that DARE is developing) to be a game changer, but their game plan is far out, two years – not now.
  4. Don’t fall for wanting to be right over making money.  I was wrong, I should have cut my losses as soon as my mental stop was hit.
  5. Respect your max loss for each trade.  Focus on minimizing the downside, the upside will take care of itself.  Instead of focusing on the amount of money you can make from a trade, focus on what is the MOST you can risk losing.
  6. Trading without a system, is asking for disaster.  Focus on three things:
    • Trading Methodology
    • Money Management Technique
    • Best Markets for Setup

Rule #1: Never Lose Money

Rule #2: Never forget Rule #1

– Warren Buffet

Trades #8, #9, #10 (CERU, VSTM, ATHX) 7/7/17

($680) in the hole, unrealized on CERU

  • Risk: ($0.10)
  • Size: 2000 shares
  • Target Price: +$0.30
  • Didn’t use a hard stop
  • The thought of being green on the trade, north of $100, then turning red on the trade messed me up. I was stubborn, and hoped that the stock would bounce back and I could break even
    • Removed “unrealized gain” from chart, focus on trading off of the chart
    • Move away from focusing on how much money you’re making on a trade and focus on managing risk
    • Capital protection is the most important aspect of trading, taking small losses is paramount
    • Cut losses, re-entry is only a commission away

CERU_7-6-17_tradesCERU_7-6-17

CERU_7-6-17_charts

  • CERU has a special meeting on July 19th to vote for the following:

CERU_7-6-17_meeting

  • I’m switching my strategy on CERU. I will wait until 7/19, if the meeting goes well, TP of $2.00

Losers average losers

– Paul Tudor Jones

+$11.08 realized on VSTM

  • Buy the breakout, I didn’t plan for this trade, emotional
  • Closed the trade because I was afraid of losing money, did not have a plan
  • No plan, horrible trade, impulsive

VSTM_7-7-17VSTM_7-7-17_charts

($2.00) unrealized on ATHX

  • Buy the breakout, I didn’t plan for this trade, emotional
  • Did not close the trade because my mindset was “this is a small money trade, I’m red right now, I’ll wait till I’m green to close.”
  • No plan, horrible trade, impulsive

ATHX_7-7-17ATHX_7-7-17_charts

Trade #7 & #8 – $CERU & $MSDI 7/6/17

Watching CERU & MSDI, both gainers

$CERU – focusing on buying the morning dip. Other traders taking profits while momentum from good news will give CERU room to run.

  • Risk: 10 cents below entry ($100)
  • Target: 30 cents above entry ($300)
  • Size: 1000 shares
  • Catalyst: good news from Dare Bio-sciences regarding merger / partnership. Day 1 spiked, likely news is slow to spread, there will be another green day.

$MSDI – same exact play, same risk / reward from entry, same size if possible, if not scaling down to 500 shares


7/6/17 7:56AM

Horrible trade. Currently down ($450)


I went long on a strong red day.


I added to a position (doubled it) out of pure greed.

I ignored my 10 point mental stop because I listened to hope & emotion over logic and my plan.

Mentally, I couldn’t cut the trade off because I “felt like” it could make it back to break even. I felt horrible for losing almost ($500) in less than 15 minutes.

I feel like shit, I lost money, I didn’t follow my plan.

I will not allow yesterday’s success to lull me into today’s complacency, for this is the great foundation of failure.

– Og Mandingo


 

Trade #6 – $MSDI 7/5/17

+$58 on MSDI

Good news / Reverse Merger play (riding morning momentum, in and out)

MSDI caught my attention, positive news on reverse merger agreement. Strong run in the morning, I wanted to get filled at 1.75, but my buy limit orders kept falling behind price action. I eventually filled at 2.17 for 1000 shares. I was looking for a retrace / dip to buy in, I missed the chance at about 2.07. I got lucky this time, I almost bought at the top.

Shortly after I was filled, I noticed volume was dropping off (losing steam) & I sold @ an average of 2.23 in 3 lots for a gain of $58.

  • 500 @ 2.21
  • 200 @ 2.26
  • 300 @ 2.27

MSDI_7-5-17

As a side note: was watching MDR on good news of a new credit agreement, morning price action did not match plan to buy dip and ride the morning rise. the news didn’t have the effect I was looking for.

Finishing reading Reminiscences of a Stock Operator, re-reading Mastering the Trade