Trade Recap - GPRO
If you haven't heard about GPRO, you've probably been living under a rock lately lol. GPRO has been on a complete tear since its IPO back in June. Here is a daily chart from Sept. 25th:
So this puppy had gone from ~$30 to ~$80--almost a triple in just a few months! I wasn't trying to short this at any point until I saw the parabolic move from $65 to $80--most likely a result of over-zealous/uncompromising shorts.
On the 25th, GPRO had a shake out over/under $80, and I thought I would enter short here after most of the shorts were panicked out, and no sane investor would buy at these levels--or would they? I thought it unlikely.
I shorted a tiny 10 shares in the afternoon at $80.50 after it broke its uptrend line. I told myself to use tiny shares and a wide stop because I "knew" this stock would have to correct/retrace, so I would add in more shares short if it moved higher. I set my stop at an asinine level, $92.10:
Here is GPRO as of Oct. 6th. My cover doesn't look so bad now. :)
GPRO Recap:
Strengths:
Weaknesses:
So this puppy had gone from ~$30 to ~$80--almost a triple in just a few months! I wasn't trying to short this at any point until I saw the parabolic move from $65 to $80--most likely a result of over-zealous/uncompromising shorts.
On the 25th, GPRO had a shake out over/under $80, and I thought I would enter short here after most of the shorts were panicked out, and no sane investor would buy at these levels--or would they? I thought it unlikely.
I shorted a tiny 10 shares in the afternoon at $80.50 after it broke its uptrend line. I told myself to use tiny shares and a wide stop because I "knew" this stock would have to correct/retrace, so I would add in more shares short if it moved higher. I set my stop at an asinine level, $92.10:
$GPRO might go a little higher, so my stop is wide. Gotta be a little early when shares are impossible to find.Apparently numerous other shorts thought the same thing as me and shorted this momo beast. Well, GPRO gave two shits about what any of us thought, and instead broke-out of the consolidation in the $80s. When it did this, I knew I had made a bad trade--mostly because of a faulty stop out price. I think the trade would have been an all-around good trade if I had chose a tighter stop at, or just after, the breakout of the consolidation. Thankfully, I didn't fight it. I admitted I was wrong and covered into a dip at $88.96 when I got home on the 29th.
— Jory (@Cambro320) September 25, 2014
Here is GPRO as of Oct. 6th. My cover doesn't look so bad now. :)
GPRO Recap:
Strengths:
- Great overextended daily chart
- Shorted after uptrend line broke
- Shorted a pop, not a drop
- Used tiny shares/small risk because I had such a wild stop out price
- Recognized the error of my ways, didn't fight the trend and covered
Weaknesses:
- Set a completely asinine stop out price, should have selected one near the breakout
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