I only had time to make one trade today and decided to pick the Big Mouth Stock. I screwed this up in one of two ways - either I was not aggressive enough or I was too aggressive. The stock PBT started to pop to the area I want to get short. The plan would be either short and add to it as it went up (the aggressive way) or wait until it short some pause in it move up and short like crazy there (the less aggressive way).
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I started shorting on the way up but stopped and allowed fear to take over. I shorted at 9.09 and 9.29 and it moved all the way up to 9.64 before retreating. I should have been adding to my short if I was going to start out aggressive. PBT fell to 9.20 then popped back to 9.50 made one more decline to 9.11 before it was off to the races peaking at 10.
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Big Mouth stocks seem to have 3 ways about them. They simply decline or they pop and decline or they pop and never look back. You need to determine this based on the action between 9:25 and 9:32. Not easy at all but based on stats you know that 60% will just decline. 35% will pop and decline. And last 5% will hand you your head if you are not careful.
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For the first group, you must get aggressively short in seconds. The second you either be aggressive or not but if you are aggressive, this will then cover your trading for 95% of the time. And a course the last you need to not aggressive but that would be hard to do if you are aggressive 95% of the other time.
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My hope on this trading method is when the stock just falls, you will win nearly 100% of the time and have a couple of big winners. When the bounce and fall happens, you should have a split of winners and losers. The last category hopefully you will not lose too much.
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You can look at some of my previous postings on how to enter Big Mouth Stocks. Basically you look to the one to three stocks that get most of the attention in After Hours after the big mouth has roared. Use the price peak and where it closes out and your guide posts to enter and judge the market the next day based on how they act.
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There is a method to my madness but many people would just say I am throwing darts at a dart broad.
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Why am I writing about this today? I felt the need to refresh my brain on why I do what I try to do. The last two weeks, I have lost more money trading in two weeksan any two week period in the last 15 months. I need to get my shit together and stop trading out of fear or out of anger.
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The numbers:
Stocks: gross -330 net -340 shares 2000
Stock Futures: none
Forex: none
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