GSS and lessons

Got SMOKED, RIPPED A NEW ONE, DRAWN AND QUARTERED, POUNDED, hyperboles seem not to be enough in describing the 15% drop of GSS today and the ass-kicking I took.

Lessons:

1) Don't fall in love with any stock, and put it on a pedestal and have big dreams about it. Trade on realities, not on ideas of rainbows and pots of golds.

2) Set stops. I could have set stops many times with a less than 1k loss. Set stops at major trend breaks, pivot points after confirmations.

3) Don't trade on wishes and dreams. Trade on reality, facts, and probabilities.

4) Before crucial earning days, if you are holding big long positions, invest in some puts before earnings, such as 1-2k worth of puts. HEDGING is smart, and hedge smartly!!!

5) Don't trust just only the people who have the same bias as you do on message boards or anywhere else for that matter.

6) Must get better at charting, and reading price action.

7) Must do more fundamental analysis.

SNDK trade

02/09/11

Got whipped out at the open today. High was at 50.72.

Lessons:

-- I did not scale in and scale out. Needs to watch price action and scale in and out accordingly.

-- Exit on the CLOSE of the day. The confirmation comes on the CLOSE of the day.

Still watching. It could be a breakout back to 52 and above, and it will retest the 50 DMA and go back down.

Changed the stop to 50.55.

Don't want to get whipped out tomorrow morning. We will see if it was the right move and whether I am breaking rules moving stops.

Here's the latest chart I drew. Notice the symmetrical triangle?

SNDK trade

SNDK trade:

Took a SNDK short trade on a swing trade basis. (Per a Miyanville chart above).

02/04/11
Entry 150 shares at 47.1001 stop at 50.31 (confirmed violation of the minor trend line and 50 DMA).

02/08/11
Big up move day for SNDK after an analyst upgrade.
4.18% up on 12.45 mm volume.
High of 50.15.
Closed at 49.80.
The 20 DMA and 50 DMA all converged with the minor downtrend line at 49.64. So around that level is the big resistance. NDX finished up .5% or so, on light volume.

I am holding strong without moving my stop or wimping out. We will see how SNDK move the rest of the week, finding out on whether today was a test of the resistance and to fall back down, or if this is a true breakout. Reminding myself I am taking this trade as an experiment in that 1) I am using a proper logical stop, and 2) using correct position sizing.