If you read my penny stock watchlist on Wednesday you know that I was particularly interested in shorting DRL’s recent surge pointing out that a break on support at 4.22 would trigger a very good short entry. Well, on Wednesday morning we got that break at market open when DRL gapped down 4.10 and then further tanked to 3.70 in a matter of minutes. I wasn’t fast enough to short shares on the initial tank, and when the penny stock calmed down I still didn’t want to short it being down 15%+ already…fearing a short squeeze off the morning panic.
I was right on as the we got a short squeeze, but it really didn’t squeeze as much as I would’ve liked, but good enough for me to put in my order for 1000 shares short @ 3.94. I figured the odds were on my side for this penny stock to drop back down below the low of the day made earlier in the morning. I thought I was on the right track as it proceeded to drop to 3.82, but then quickly jumped back up to 4.00. It flat-lined at 4.00 for a few hours causing me to rethink my positioning in this penny stock especially since I had class within the hour. In my mind I was still confident we’d make an afternoon fade down to the low of the day or further…..
So I went to Spanish class short in a penny stock that I THOUGHT would have an afternoon fade. When class got out I figured I’d get back to my computer to see this sucker of a penny stock down to the low of the days. Yet the exact opposite happened…as I opened up my SogoTrade platform I saw that DRL 4.69! .75 cents above my shorting price! I got juiced! I quickly covered my position and absorbed my losses of $752.
This lose totally erased my nice $661 dollar gain on MDVX I made on April 7.
With all the bad that surrounded this trade, some good DID come out of it. Here’s a lesson that can be learned from my lousy trade.
Never have a short position (or any position for that matter) that you’re not confident in open while you’re away from your computer or can’t keep watch.
Also, another lesson I learned is that I shouldn’t go to class. Just kidding!
Hopefully with that lesson learned I can prevent this kind of mistake from happening again. For your viewing pleasure I’ve attached the chart I was looking at when I made & closed the trade.
{ 4 comments… read them below or add one }
Tough luck, buddy.
It has happened to me too. For me, the rule is that if I can’t keep an eye on trade, put a stop loss in place before I move away from my desk.
RJ
Yeah that’s tough. You made a reasonable interpretation of the chart at sub 4. Even just a few minutes more and you would have seen a hold of 4 which probably would have made you get out. I guess you’ll be putting stop losses in from now on. Or just don’t go to class!
I will definitely be putting in some stop losses for now on before I go to class
got to watch even dollar marks!