Yet again we had a market rally followed by complete disaster the next day. As soon as everyone is feeling comfortable about a bottom being put in we’re right back at it in a panic.
The market continues to have low liquidity in small cap – the trades are there no doubt but if you stay for too long the gains are gone – fast. IMUX LASE IMRN etc all great examples just Friday alone.
TOP standard/solid liquidation play once again the even better move with more size came AFTER the first crack and PROOF it was staying heavy (there is a point here I want to make with the $15 push that we discussed in the room as to why I re sized in short — and when I say re-sized — I am STILL not trading these as big as I used to for the reasons we’ve discussed each week) compared to something like ILAG.
IMUX an example of being a few steps ahead.
Sucks seeing a lot of blow outs on Twitter tonight.
Auto MAX stops save CAREERS 💯
Have NO EGO. Do it!
I promise you'll be PISSED half the time b/c it was top.
THE other half you'll be ANNOYED but HAPPY.
At least one of those times actually saves you from an outlier event.
— Nathan Michaud (@InvestorsLive) October 15, 2022
The main topic I want to get to is ILAG – I feel like a lot of people are going to need the pick me up, the coaching, the reminders and the keep your head in the game. I’ll go over some ideas on video — as you know I always try to highlight all my major losses in a video to be able to reference it in the future.
One of those was my $200k loss YouTube video, one of those was the KODK discussion losing $1.2 million and countless other discussions we’ve had over the years on AMC action CLOV etc.
So, what can you do from here and what should you know?
ILAG unfortunately for many I think this is a career DEFINING trade. I saw a lot of horror stories on Twitter Friday. It reminded me how I felt with KODK that first “oh shit what have I done” moment.
First off, kudos to those discussing it on Twitter – this is when you will meet your REAL friends. Don’t let anyone who just sub tweets make you feel any worse about your loss. They wish they could lose what you did and still be okay, talk about it and come back on Monday – otherwise they wouldn’t be sub tweeting. You excel when they peak. It ain’t easy – there’s nothing positive about it EXCEPT that every GREAT trader I know had this moment, so chin up and stay focused. It’s the first of many war stories of your journey.
I think most people will chalk it up as impossible, no liquidity, circuit halts etc — while I agree that was tough there are two main things that you have to review/admit otherwise you’ll be faced again with the situation and possibly make the same mistake.
And take this as hindsight and I told you so if you want — or take it for what it is and understand I am trying to make the point and the warning signs that where there to prevent it from happening again.
- If everyone does the SAME thing (ex: style of posting always)
- 30-45 minutes key line $4.2x’s reminder in room – why?
- Auto Max stop – every second matters
- Sizing up
- What if?
This is where automation comes in to take that decision away. The difference between thinking about covering and actually doing it is the difference between getting the cover or not. Heck, even participating in the auction – which I would bet many didn’t do because you want to ‘see how it opens’ no doubt, been there, done that. Again – WHAT IF?
I know I over warn a lot and repeat myself a lot but a big discussion since MEGL is that sooner or later these will catch up, you can’t always “go bigger” and the most obvious is never obvious.
I know I beat a dead horse a lot on the reminds day in and day out – and they never matter until they do. Friday is an example of why.
I never wish this crap on anyone — but I think many now understand the why – the hard way. Staying positive. Focus on REALISTIC expectations. Time fixes everything.
Been there, done that. Hope these comments help.
You only need to get rich once, the hard part is keeping it. Most don’t realize what they had until it’s gone.
Solutions:
- Wire
- Split Accounts
- Don’t sink all accounts in
- Max stop
- Let things prove vs. expect
Giveaway Winners
- Daniel Manahan – T-Shirt
- Zarols 94 – T-Shirt
Video Scan and Game Plan
Stocks to Watch
IMUX morning shove is ideal again vs $10.50s – key levels have been working well on this one despite how annoying it is as it grinds back each day. Nice puke out Friday for the good trade — had that not happened let’s be realistic, I’d probably be a little annoyed again.
AMD reactive trade with the market.
Failed Follow Through:
APDN very nice entry/idea on Friday clean while no one was looking.
TOP ideally $1-2 ramp on air and then fades back – really nice focus on Friday.
ILAG morning shove and failed follow through is ideal – just need to build a buffer on this one as emotions pass. May have
BEAT quiet off radar watch any good rips for fade.
PEGY finally cracked – all pops for failed follow through.
BHVN quiet off radar ideal for fader.
Continuation:
AGFY watch dips if they soak/trap — for break out.
SOUN watch for continuation trade off dips – nice scan hit Friday and idea
Staying Familiar:
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