This is by far my most profitable trade to date (alas, it is only my 6th trade over all).
Here is how it played out: I had been watching this stock for a couple of days; it was also featured on Tim’s daily watchlist and due to the news in Ferguson, there were great chances that the stock would surge. I was watching it pre-market and there was quite some movement. I entered my position as soon as the market opened.
Entry price: B7.29 150s @ 9h30
Exit price: S8.08 150s @ 10h02
Total profit: 118.50
Stop Loss: My 5% mental stop loss was set at $6.93
I didn’t have an expected gain, maybe that was a mistake, but I’m glad I did let it play for as long as I did.
As can be seen in the chart (that covers to the EOD), the price actually went about 60 cents higher than when I exited, but I made solid profits and I’m quite satisfied with that.
Here is the screencast of that trade and how it played out for me.
Lessons Learned:
- Stick to the 5% rule and good things happen (I was scared as the price dropped suddendly and was ready to exit if my profit dropped below $15 – which would break even my commissions and make my losses null).
- Always be ready to exit
- Always set price between ask and bid
- In order to enter pre-market, the order must be set to GTEM, otherwise the DAY doesn’t get executed until the market opens (got this info from the Trade Desk)
Additional notes:
Throughout the day I watched the market and I was looking closely at $DGLY and $JRJC, however aside from this morning spike, Friday August 22nd turned out to be a flat day and I didn’t get into any other positions.
Morning spikes are quite the rush.