In the grand casino of Wall Street, where fortunes are made or lost in the blink of an eye, navigating the stock market can feel like trying to solve a Rubik’s Cube in the dark. But fear not! As an engineer turned market maverick, I’ve decoded some of the mysteries of successful trading, armed with nothing but my wits, a few charts, and an unshakeable love for caffeine. Let’s unravel these secrets together.
The Opening Gambit: Choosing Your Battles
The Art of the Entry
Entering the market is akin to stepping onto a battlefield. You want your timing to be impeccable and your strategy sound. Here’s the golden rule:
- Strike When the Iron is Hot: Look for stocks either making a bold escape from a base pattern or gracefully rebounding off the EMA 21. It’s like catching a wave – do it right, and you’re in for a thrilling ride.
My Adventure with SHOP
When I stumbled upon SHOP, it was as if the stars aligned. Here’s why I jumped in:
- A Stellar Candidate: Following the CAN SLIM methodology, SHOP was bouncing off the EMA 21 with the elegance of a ballet dancer. The accumulation phase was in full swing, and the sector was as robust as a freshly brewed espresso.
Navigating the Mid-Game: Holding Steady or Cutting Loose
To Hold or Not to Hold
As the plot thickens, we find ourselves questioning our every move. Here’s how the saga continued:
- Assessing the Terrain: Holding on to a stock is a test of patience and nerves. It’s crucial to keep a vigilant eye on market trends and not let emotions cloud your judgment.
The Twist in the Tale: The SHOP Saga Continues
SHOP’s journey had its ups and downs, much like my attempts to cook a gourmet meal:
- An Unexpected Turn: Despite a promising start, SHOP decided to take a nap mid-party. Exiting at $77.38 felt premature, like leaving a blockbuster movie during the climax.
The Grand Finale: Lessons Learned
The Moment of Truth
Every trade, successful or not, is a treasure trove of insights. Here’s what I unearthed:
- The Good, the Bad, and the Ugly: I nailed the entry, but the celebration was short-lived. The stock’s volatility was a roller coaster ride I wasn’t prepared for.
Pearls of Wisdom: The Guide to Trading
In the aftermath, a few truths emerged clearer than ever:
- Volatility is a Double-Edged Sword: It can offer exhilarating gains but also harrowing losses. Tread carefully.
- Deep Bases are Deceptive: They may promise riches but often lead to despair, much like the allure of an all-you-can-eat buffet.
- Intraday Volatility – Not for the Faint of Heart: It’s the Wild West out there. Best to stay in the safety of structured strategies.
- The Euphoria Trap: When stocks soar too high too fast, it’s a signal to either tighten your grip or gracefully exit, stage left.
- The Earnings Date Alarm: Always check for upcoming earnings. It’s like looking both ways before crossing the street – it could save you from a world of pain.
details at a glance
Opening
- Underlying: SHOP
- Date: 2 Feb 2024
- Underlying Price: 81.69
- Stop Loss: 75.74
- Profit Target: 98.03
- Market Outlook: Confirmed uptrend
- RS Rating: 94
- RS Line Trend: Upward (U)
- Industry Rank: 14 / 197
- Volume U/D Ratio: 1.5
- Position Risk, %: 7.21
- Position Risk to NL, %: 0.27
- Potential Profit (Position), %: 19.80
- Risk to Reward Ratio: 0.36
- Position Size, %: 3.76
- Reason for Opening Trade: “CAN SLIM stock. Price bounced up from the EMA 21 line. Stock under accumulation (U/D=1.5). Industry strong.”
- Was it an Ideal Buy?: No. Stock was not in the buy zone.
- Remarks: Since the earnings date is close, I’m not planning to increase the position size.
Closing
- Date: 13 Feb 2024
- Price (Close): 77.38
- Market Outlook: Confirmed uptrend
- RS Rating: 91
- RS Change: -3
- Remarks: Stopped out. The market downturn appeared as expected. RS rating has dropped significantly.
Results
- What Went Well?: Although the stock wasn’t coming out of the base, I bought it close to EMA 21. Regarding playing by the EMA 21, I bought at the right place – when bought, the price surged above EMA 21 with strong volume.
- Cause of Error / Improve: I bought too volatile a stock. The price had been bouncing up and down. The previous base was 36% deep, which is a lot. When bought, the price was far out of the base and extended. During the trade, the price got euphoric; I should have raised the stop-loss.
- Lessons Learned: I bought it too close to the earnings date. Earnings were 11 days away.
- Position ROI, %: -7.15
- Position ROI (Portfolio), %: -0.27
- Position Open Time (Trading Days): 7
- Position Open Time (Days): 11
Epilogue: The Trader’s Journey
As we draw the curtain on this tale of triumphs and tribulations, remember that trading is as much about the journey as it is about the destination. To my fellow analytical souls venturing into the tumultuous seas of stock trading:
- Embrace the thrill of the hunt but remain vigilant.
- Learn from each skirmish, whether it ends in glory or defeat.
- Let humor be your ally in the face of adversity.
Trading is a blend of art and science, intuition and logic. May your trades be fruitful, your losses small, and your spirits high. Here’s to mastering the secrets of successful trading, one calculated risk at a time. Happy trading, and may your portfolios grow to monumental heights, defying gravity and expectations alike.
