This article covers live trading on stock symbol PALI. The stock surged 136% on the day with an opening price of 1.17 and with over 52m volume already by 9:40 AM in the morning. The total float is 8.5m which seemed within acceptable range (not too abundant)
Live Trading video:
Entry criteria:
I decided to enter close to open price of 1.17 area as the risk (stop loss) with an aim to reach 1.43 (morning high) and potentially reaching new highs for the day.
Entry risk reward reasoning:
- Long at 1.22
- Risk days open 1.17
- Risk 5 points and target 1.44 (previous high volume days closing price)
Entry timing comments:
- Went in too keen and early
- Although price worked out at the end, without confirmation of a bounce, trade could have gone south very easily
- I did not stick to entry timing strategy (patience and waiting for a confirmed bounce)
- Need to only enter a position when there is a confirmed bounce
- Need to remember to not enter a trade on an uptrend orginating from fear of missing out on the trade
Exit comments:
- Did not time my exits correctly
- First half exit was ok at 1.37 (15 cents per share)
- Second half I should have taken profit at 1.44 instead of being greedy waitng for price to continue to new highs.
- I ended up exiting at 1.14 (8 cents loss per share)
- An alternative could have been I exited half of my remaining position at 1.44 and hold on to rest and exited at stop loss level 1.14 region
Risk management:
Ended up sticking to 1.15 stop loss / risk region with the remaing half of the shares
Overall results:
- Made $15 on first 100 shares
- Lost $8 on the remaining 100 shares
- Total gain $7 or 2.86% on my investment
Learnings:
- Don’t forget to scale out of position
- It can even be as low as exiting quarter of the total position at a time
See you in the next trade!
