Report Card #14 & #15

Dear L.,

after no trades on Thursday, I put on three trades today and surprisingly the result was three wins.

Let´s have a look at today´s opportunities.

Because of an analyst upgrade this morning SLNO (Soleno Therapeutics, Inc., Healthcare Sector) gapped up. In general, analyst upgrades are no news worthy of a 20%+ gap. This and the fact that SLNO has very weak fundamentals, made me quite bearish. When the market opened, SLNO tried to spike but failed in doing so. I entered my short at $3.27 when SLNO seemed to fail VWAP. I was a little on the early side but a few minutes later SLNO did fail and washed down to $3 where I covered at $3.02. SLNO bounced and I put my short back on again at $3.23 to cover at $3.04. When SLNO bounced for the third time, I was ready to reshort again. The stock did not reach my anticipated entry level though. After failing crucial support at $3, SLNO went to lows of $2.8. This once more demonstrates that I am not patient enough with my exits. After my second short, I should have left some shares on instead of covering all. In fact, I did expect support to fail. Trading in this way however my risk/reward still is not acceptable.

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In the afternoon, chat rooms went crazy and pumped a list of stocks such as CHNR, CADC, CCCR, YECO and CREG (China Recycling Energy Corporation, Industrial Goods Sector). Because I was not able to locate shares for the most extended stocks, I shorted CREG.

CREG reached a high of $2.06 before trading off. When a very bearish candle appeared on the chart, I expected CREG to wash below VWAP and shorted at $1.9. I was too early though. CREG made a final attempt to break the high of the day. When it failed however, it went below VWAP and was not able to reclaim this anymore. I covered at $1.8. As we may see on the chart, CREG reached a low of $1.7. Once more, my failure to exit properly and a bad risk/reward are demonstrated. I should have taken off half into the wash and set a stop on break even above VWAP for the other half.

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While I am happy about the three wins today, I have as well realized that I truly need to improve my exits. Without patience, I obtained a D+ today.

Best,

Nils

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