Tuesday, April 26, 2016

NEOT: Largest loss to date

I'mma keep it short... Went to work with only 2hours of sleep.. Ran scans at 0800 EST, nothing good showing up.. might be a lame day.. ran another scan a few mins from opening.. NEOT, gapping from 1.08ish to 1.4ish.. Due to me being sleepy and not functioning well, miscategorized the play/wrong exit plan. This inital mistake snowballed into numerous other mistakes that couldn't have been prevented if I didn't trade in the first place.

Mistake of the year so far: Sleepy/Not in the appropriate mental state to trade.

On my desktop I have post-it notes attached to my monitor. The first visible one is a checklist i run through to make sure i'm in a mental/emotional/physical state to trade. Question #1 on there is-- Did I get enough sleep? if no, don't trade. Broken..

Since swapping to trading on my laptop and at work/no access to the post-it notes i have on my monitor. To remedy this, I will be making a binder and in it will be the checklists i will be running through prior to trading as well as having other checklists to maintain a consistent pre-market open process.

NEOT




Previous day's Lows:  0.77
Previous Close:           1.02
Today's open:              1.31
Pre-market's High:      1.45

This pre-market pattern was one i haven't played yet as my first profit target is usually the pre-market's high. In this case i aimed to buy it breaking out of the 1st minute's candle when it tested 1.45 as well as the pre-market high. The most important thing i totally did not heavily account for was the fact that it was waaay up on %gains from yesterday already..  30% from the previous day's close and almost 90% up. 90% up !!! Normally, i'd be very very very cautious about even entering a trade and if i do, the goal would be to just scalp it.. I went in thinking the stock had at least 10% of upside, I was already up 5% on my position and an easy 200$.. I actually thought about sizing down half my size but i held on not knowing this should have been a scalp play.. far worse was how far my ideal entry was from my actual entry.. Ideal entry was at 1.3, i entered at 1.47... 17cents off but my mental stop was at 9ema at 1.41ish.. horrible risk/reward ratio and resulted in my biggest loss to date. My entry was too far from my ideal entry/chased hard since i waited for a flag pattern to form. A gap+go strategy from DTW would've been ideal here.

On a positive note, I really liked how well i had my emotions kept in check while i was in the trade. I stuck to the plan I had even though it was a flawed plan to begin with.

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