September 7, 2014

Trade Recap - SGOC

Here is a one year daily chart for SGOC. This hit my scan on the big green candle with massive volume in late August. I noticed this stock had ran hard/spiked in the past. So I was not in a short mentality but a long mentality.


I decided to look for a weak open entry, then hopefully a red to green (R/G) move and continued momentum. So I set my first entry price at a support level during the previous big green candle day around $2.67. And for some reason I felt an additional entry at major support from the previous day at around $2.50 would be a good add.


My first and second entry were hit. Now the first entry was a solid idea, but the second entry was entirely stupid in hindsight. If I'm planning on continued momentum, I should plan on the first support level of the previous day holding, and if not, then get the hell out of the trade, don't add! This is what I learned today. Neither support level held, and I payed the price. Well, because I set a comfortable stop loss, the price I payed was minimal :)



And that is key, only execute trades with a risk/stop price that you are totally willing to embrace. Moreover, if the trade fails, that dollar loss must not and cannot affect you emotionally. If it does, your jeopardizing your future trading decisions. In SGOC's case, it would go on to tank to almost $2.00!


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