Embarking on the journey of trading new stocks is akin to setting sail on the high seas without a compass. It’s thrilling, unpredictable, and yes, sometimes you end up a little seasick. My recent voyage with BHVN was a testament to that – a stock that promised clear skies but delivered squalls.
Diving In: The Opening Act
On a seemingly ordinary day, February 5th, I decided to plunge into the waters with BHVN. The stock was priced at $46.81, and I set my anchor at a stop loss of $43.03, dreaming of reaching the $56.17 treasure island.
- Market Outlook: The stars aligned, signaling a confirmed uptrend. Or so I thought.
- Strategy Unveiled: Armed with charts and trends, like a modern-day pirate with a treasure map, I embarked on this quest, albeit a tad outside the ideal buy zone.
Why did I take the plunge? Sometimes the call of the uncharted waters is too strong to resist, even when the map is a bit blurry.
Weathering the Storm: The Closing Curtain
Fast forward to February 21st, 2024, and the skies had turned. My ship, BHVN, docked at a closing price of $45.73 – a bit shy of where we started.
- Final Glimpse: The uptrend was still there, but like a distant lighthouse, it wasn’t enough to guide my ship safely home.
- Reflections: The market’s tides, ever fickle, decided it was time for me to walk the plank, triggering my stop loss and ending my voyage with BHVN.
Navigating the Highs and Lows: The Results
The journey with BHVN was a mix of highs and lows, akin to a roller coaster designed by Mother Nature herself.
5 Things I Did Well
Even amid the unpredictable waves of BHVN, there were moments where my trading compass pointed true north. Here are five things I did well in this turbulent journey:
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- Choosing a Strong Industry: My selection was not random; I anchored my decision in a sector that showed promise and strength, navigating by the stars of industry performance.
- Embraced New Horizons: I ventured into uncharted waters by investing in a relatively new stock, embracing the adventurer’s spirit of discovery and opportunity.
- Strategic Entry: Though the timing was more art than science, my entry was based on a blend of market trends and indicators, like a sailor reading the wind and waves.
- Aware of Market Accumulation: I recognized the signs of market accumulation, akin to noticing gathering clouds on the horizon, indicating a potential storm of activity.
- Calculated Risk Management: I knew the seas could be rough, so I chose a small position size, a lifejacket of sorts, to keep me afloat if the waters turned choppy.
Lessons Learned
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- Next adventure might need a calmer sea or a more forgiving stop-loss strategy.
The Treasure Chest
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- The ROI wasn’t a buried treasure, but it wasn’t a sinking ship either.
The Art of Navigation: It’s All About Focus
Trading new stocks requires a navigator’s focus. We can’t avoid all storms, but we can start with a small ship and a tight grip on the wheel. As the wind picks up in our favor, we can expand our sails and give ourselves more room to maneuver.
- Choosing Your Battles: Not every new stock is a BHVN, but every BHVN teaches a new lesson in navigation.
- Strategic Retreats: Knowing when to cut losses is as crucial as knowing when to set sail.
DETAILS AT A GLANCE
Opening
- Underlying: BHVN
- Date: 5 Feb
- Underlying Price: $46.81
- Stop Loss: $43.03
- Profit Target: $56.17
- Market Outlook: Confirmed uptrend
- RS Rating: 99
- RS Line Trend: Up (U)
- Industry Rank: 2 out of 197
- Volume U/D Ratio: 1.5
- Position Risk: 7.99%
- Position Risk to NL: 0.35%
- Potential Profit (Position): 19.80%
- Risk to Reward Ratio: 0.40
- Position Size: 4.34%
- Reason for Opening Trade: Price broke above EMA 21, market slightly down. SEPA stock.
- Ideal Buy Assessment: No. Price wasn’t in the buy zone.
- Remarks on Opening: Stock in a leading industry (TOP 2)
Closing
- Closing Date: 21 Feb 2024
- Closing Price: $45.73
- Market Outlook at Close: Confirmed uptrend
- RS Rating at Close: 98
- RS Change: -1
- Remarks on Closing: Portfolio stop-loss was triggered, and the position was in a loss, leading to closure.
Results
- What Went Well:
- The stock was bought from a very strong industry.
- A relatively new stock was tried.
- At the time of purchase, the RS line was in an uptrend, and the RS rating was maximum (99).
- The stock was under market accumulation (U/D ratio significantly > 1).
- Awareness of the risks of volatility led to choosing a very small position size.
- Improvement Points: Consider whether to avoid more volatile stocks or widen the stop-loss up to 10% with new strong ones (half at 5%, another half at 10%).
- Position ROI: -4.25%
- Position ROI (Portfolio): -0.18%
- Position Open Time (Trading Days): 11
- Position Open Time (Days): 16
The Captain’s Log: Final Thoughts
Is trading new stocks easy? If my experience with BHVN is any indication, it’s more like decoding a cryptic map while balancing on a tightrope. The stock’s performance was as unpredictable as a compass in the Bermuda Triangle, offering a mix of exhilarating highs and testing lows.
- Embrace the Adventure: Every trade is a journey, and each journey comes with its own set of waves to ride.
- Chart Your Course: With focus and strategy, the tumultuous seas can lead to discoveries.
In essence, trading, much like life, is about making calculated decisions amidst uncertainty. Whether we’re charting unknown territories in the stock market or navigating the complexities of our daily lives, a blend of courage, strategy, and a sprinkle of caution can steer us toward our desired horizons.
