November 1, 2014

Trade Recap - ONCY

On Friday, I pulled up my FinViz scan around lunch time and noticed this beautiful overextended daily chart of ONCY:

ONCY had doubled in just a few days and broke through the key magnet of $1. Therefore, I was short-biased on any trend break but wouldn't hesitate to go long if ONCY continued to uptrend and breakout in the afternoon. Why? Because this daily chart attracts the most short sellers, and if ONCY didn't breakdown, it likely would squeeze some shorts and breakout, or at least re-test HODs.

I pulled up the intraday chart, noticed ONCY was in a nice unptrend, drew trend lines, and waited for the uptrend line crack to short.

ONCY cracked the uptrend line fairly quickly, and so I shorted $1.03, risking to $1.05 (i.e., if $1.05 didn't become resistance, I'd get out). ONCY washed out immediately sub-$1 and I covered half into that washout. ONCY popped back up to $1.05, which spooked me, so I covered the rest, despite the fact $1.05 became resistance, which was exactly what my trading plan accounted for, and actually would have been a good add:

Unfortunately, I began to over-trade ONCY (long and short) because I was now out of my perfect entry, which pissed me off. ONCY continued to downtrend all the way to 85 cents! That's almost 20 cents from my entry, or about a 20% move! If I had simply followed my original plan, this would have been a very nice gain for me. Instead, I turned it into a loser overall.

So my takeaways from this trade recap are:

  1. Stick to the original trade plan, it's my edge, and that edge makes me money if I follow it.
  2. If I get spooked out of a trade, don't get pissed off and start revenge trading/over-trading. Revenge trading and over-trading always lead to losses for me.

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