$HMNY Video Lesson and Key Takeaways + Free Chat Logs

We have a webinar at 8PM tonight that is free to the public but you must have already registered! If you can’t get in by the time it’s going not to worry we’ll have a recording of it!

We’ll be going over what works in this market since .. of course .. the market is always changing. The key is to adapt, ALWAYS. We will also be answering any questions you may have about trading

Here’s a video from last night discussing HMNY

My goal was to buy a wash out this morning more it gapped down and pulled the better, SSR would likely be on if a big gap down (over 10%). You can see in the chat logs the trades today pre market when no one wanted it into panic/fear and then adds once the SSR kicked on and support held.

Some Key Takeaways from HMNY

HMNY is one of those trades that triggers a lot of emotions in traders. These exponential runners can be difficult to trade, but there are a few key things to keep in mind.

Buy Into Weakness & Sell Into Strength

Our goal is always to be smarter than the rest of the market. In this sense, we almost utilize a contrarian strategy when approaching these types of plays. We want to buy when everyone is panicking and sell when everyone is overly bullish. For this reason, it’s important to get the right entry (discussed in depth below). You don’t want to be buying the breakouts on a stock like this. By that point, you may be too late to catch the bulk of the move. Instead, focus on starting a position on pullbacks using a set risk and sell into spikes.

Don’t Short Just to Short

A lot of traders see a massive runner and automatically assume it’s a short. While it may eventually be a short, you need to be smart with your timing. Don’t short just for the sake of shorting. It may seem like an obvious short when it’s up 300%, but then what happens when it’s up 400%…500%…etc?

Account for Risk When Choosing a Position Size

There is a huge difference between a stock with $0.10 downside risk and a stock with $1.00 downside risk. They can both be profitable setups, but you need to plan your entry accordingly. If you generally trade 5000 shares when there is a $0.10 downside risk, you will want to consider trading 500-1000 when there is $1.00 downside risk. Obviously, this relies heavily on being able to calculate your risk. I will use VWAP and confirmed support levels to determine risk before entering a trade. This approach also allows you to scale into the trade and not get stopped out because you went in too big.

Scaling and Locking in Profits

It’s easy to analyze a stock like HMNY in hindsight, but playing it in real-time is much different. Give yourself the best chance of making this a profitable trade by mitigating risk and avoiding greed. You don’t need to go “all in” with your first entry. You can scale into the trade as you get more insight into the price action. You should also be locking in gains as you go. In hindsight, we can see that HMNY was a crazy runner, but at the time, no one knew where the top was. The stock could have reversed at any time. For this reason, you need to make sure you lock in profits along the way. It’s better to regret taking profits early than it is to regret turning a winning trade into a loser.

HMNY Comments in Chat

08:34:07 am InvestorsLive: damn was filling HMNY

08:34:15 am InvestorsLive: then upticked

09:05:40 am InvestorsLive: HMNY goal would be same as scan ideally gap down wash trigger SSR – obviously will do that here if it opens … I started in when I mentioned I was filling bids came back and filled some more

09:36:18 am InvestorsLive: HMNY i think rips r/g careful shorting andalso lock in along way

09:41:11 am InvestorsLive: That’s $1/share HMNY reminder to pay yourself along way

09:47:49 am InvestorsLive: HMNY dips are being absorbed

09:54:04 am InvestorsLive: I’m about 1/3 size on HMNY left from idea — $7.60s appeared to soak large so if this dip holds and it reclaims next leg likely comes

10:02:56 am InvestorsLive: HMNY they continue to soak $7.60s

11:21:27 am InvestorsLive: See lots of comments on HMNY etc shorts into weakness and long into strength – need to think opposite here

11:22:42 am InvestorsLive: just trying to help – be careful w/ entries like that always best to short into strength / panic and buy into washouts / fear also sell into rip etc I am still holding partial core from $6.06-6.07s

11:52:36 am InvestorsLive: congrats everyone .. very well scripted

11:52:43 am InvestorsLive: hopefully on one is stuck short

11:54:50 am InvestorsLive: I dont want to be a broken record guys but PLEASE

11:54:55 am InvestorsLive: PLEASE STAY FAR AWAY FROM SHORT

11:54:59 am InvestorsLive: until it CRACKS

11:55:08 am InvestorsLive: the $2-3-6 dollar moves come after the $1-2 moves