Report Card #11

Dear L.,

I did not trade today. However, there was a very impressive stock today that I want to talk about. This morning GEVO (Gevo, Inc., Basic Materials) gapped up on rather low quality news. My plan was to short into VWAP. Unfortunately however, GEVO is a low float and I was not able to locate any shares. In the first hour of the day, GEVO was very weak and VWAP rejections worked perfectly.

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When GEVO failed to make lower lows however and finally reclaimed VWAP, the trend completely changed. This is what happened up until now…

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A combination of shorts being squeezed and longs chasing GEVO has brought GEVO to a current level around $11.70 form less than $5 this morning. The pain of the shorts became especially apparent when GEVO broke $7. It seems as if some short threw in a market cover order since GEVO quickly jumped 50 cents on big volume.

I really hope that GEVO closes strong and that locates will be available tomorrow. In this case this may offer some great trading opportunities tomorrow.

Best,

Nils

 

Report Card #10

Dear L.,

I did not trade on Friday. Nevertheless, there is still an update on a trade on CHOOF (Choom Holdings Inc., Medical Cannabis Sector) that I made this week. The Cannabis Sector has been on fire in the last few months and on Wednesday CHOOF finally followed suit.

Breaking out of the 86 cents level, CHOOF reached multi months highs and closed at $1.04. I entered with a very small position size at 82 cents and held overnight. My plan was as follows: Despite the large gain I expected CHOOF to appreciate more in the coming week. Therefore, I decided not to take shares off on Thursday morning despite the fact that I expected CHOOF to have a weak day. Recently we have seen this pattern in the OTC sector. A stock breaks out and sells off the next day just to find its strength again on day three.

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Coming into the trading day on Thursday my plan was to stop out below 85 cents. I was ok with giving back my profits up to this level. CHOOF indeed was very, very weak all day, giving back most of Wednesday´s gains. It found a low of just above 84 cents, thereby stopping me out.

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Coming into Friday´s trading session I did expect CHOOF to bounce again. However, since this was rather a hunch than strong conviction, I did not put another trade on. My hunch turned out to be correct and CHOOF closed close to this week´s highs.

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While this trade is unfortunate, I followed my plan all along. I bought the breakout, accepted the sell off on Thursday, got stopped out and did not want to gamble on Friday. The only thing to criticize may be me stop level at 85 cents. I think that it was too close to the support level. The fact that I almost got stopped out on the low of the day closely demonstrates this.

Best,

Nils

Report Card #9

Dear L.

today was a pretty uneventful day in the markets. I took one trade according to plan though which turned out pretty nice.

NNDM (Nano Dimension Ltd., Technology Sector) is a trash stock we already have visited earlier this week. Since its gap up on Monday, it has been selling off. Today I thought that the most likely thing was some more sell off below VWAP.

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When formulating my pre-market plan, I decided to orient myself of the $2.46 overhead resistance level. When NNDM could not break this level in the first few minutes after the market had opened, I shorted the stock at $2.41. I tried to cover into the first was down to $2.3. However, there was not a lot of liquidity and I did not want to chase NNDM up again. After another VWAP reject, I was able to cover for a second test of the $2.3 level at $2.31. Later in the morning, I tried to re-short at $2.34 but I did not get any fills.

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At the moment it looks as if NNDM is headed lower. I´ll continue watching this and see if it can become an all-day fading stock.

Regarding my goals of more consistency and a better Risk/Reward, I think that I deserve the grade C+ today.

Until tomorrow.

Best,

Nils

Report Card #8

Dear L.,

after yesterday´s terrible trading, today was a quite good day. Three small trades – three small wins. This time I explicitly paid attention above all not to go against the plan that I had formulated pre-market.

So… let´s just get right into it.

This morning. On the top of my watchilst were three stocks.

The first one was CANF (Can-Fite BioPharma Ltd., Biotechnology Sector). CANF gapped up around 20% this morning on news of an analyst upgrade to $8.

Let´s have a look a t the daily chart to get a general feeling of how CANF has been trading in the past…

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This stock just toxic. It has been selling off for years and usually does not hold gap ups very well.

My plan was to wait for at least the first three minutes to get a general feel of how CANF was trading. Depending on the trading action, I wanted to short into VWAP with either a risk of pre-market highs of $1.62 or next resistance at $1.72. Close to the market open CANF already traded far off these pre-market highs which gave me more confidence that most chasers would bail out.

When the market opened, my plan worked out quite well. CANF fought at VWAP and I got short at $1.51. I must admit that this was almost a little chase again and I definitely could have gotten a better entry. When CANF flushed to $1.4 I covered at $1.42. CANF bounced to $1.47 before going lower. Here, previous support became resistance and I should definitely have put on the short again. However, I did not and left CANF for the rest of the day.

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GLMD (Galmed Pharmaceuticals Ltd., Biotechnology Sector) was the second stock I was watching. Yesterday, GLMD gapped from around $7 to $25 on admittedly very positive news. After reaching a high of $27.55 it sold off for the rest of the day. Both the positive news and the fact that GLMD had already been selling off for the previous day, put me a little off when thinking about shorting it today. Nevertheless, I was convinced that this would sell off more today.

I determined the $18.8 level as key resistance from yesterday and wanted to short GLMD into VWAP with this level as risk. The market opened and GLMD spiked exactly to this level, topped out there and started selling off quite considerably. Because I was busy with CANF I did not trade GLMD. The overall thesis seems to have been correct though.

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The third stock on my watchlist was VTGN (VistaGen Therapeutics Inc., Biotechnology Sector). VTGN gapped up on patent news this morning. The interesting fact about VTGN is that it usually does not hold gap ups at all. On the daily chart below, we see that just in the last weeks two significant gap ups were used to sell right into. Given the rather pathetic news today, I expected similar things to happen.

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VTGN confirmed my view and was very weak during the morning. But due to my CANF trade, I did not trade this either.

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The second stock that I ended up trading was SEII (Sharing Economy International Inc., Industrial Goods). Some pumper took advantage of the “incredible” PR that SEII would enter into a licensing agreement to create an internet site in North Korea to pump the stock in the morning. When SEII fell below VWAP I shorted at $4.44. To be honest, I expected the stock to quickly reach $4.2 but I guess that the manipulations continued and when $4.3 did not break I covered at $4.36. Shortly thereafter, SEII tried to break VWAP yet again. However, the tape seemed very weak and so I decided to put the trade on again at $4.48. Again, SEII was not as weak as expected and thus I covered at $4.4. A few seconds later, SEII spiked again. At this point I wanted to put the trade on for a third time. However, it was almost 11:00 and I wanted to follow my rule not to put on trades around lull.

Overall, I am quite happy with how I traded SEII.

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Given my overall goals, I would give myself a C today.

Let´s see what will happen tomorrow.

Best,

Nils

 

Report Card #7

Dear L.,

It is getting kind of embarrassing. I wrote about this before, and before but I end up doing the same mistakes again and again. While my overall thesis seems to be correct, my trade executions are just terrible. Especially today, this is very disappointing.

Today, I had two stocks on my watchlist that I planned to trade. The first one was NAKD (Naked Brand Group Inc., Consumer Goods Sector). Based on approval for a merger, which has been already known for a year or so, NAKD gapped up more than 40%. Longs chased NAKD up pre-market. But close to the market open, there were already lower highs. My thesis was that this was most likely to bleed for a considerable part of the day. I went into the market with the plan to short into VWAP.

And indeed, NAKD was very week when the market opened. I missed my entry at $2.19. When NAKD showed more weakness, I became more and more desperate to “just be in this trade” and chased the short, selling at $2.14. Just a minute later, NAKD spiked over VWAP, taking weak shorts like me out. I got stopped out at $2.3. Yet again I have to ask myself, why did I choose 2.3 as my stop? This was not a resistance level. There was clear resistance around $2.35 and the pre-market high was $2.44. Thus, a break of either of these levels should have been my stop. After having chased my entry at $2.14, I quickly decided that 2.3 would be appropriate though. There are two things to note here. Firstly, having chased NAKD put me in a very uncomfortable position with a very bad average. I did not want to put my stop higher than $2.3 because the loss would have been “too big” at this point. Instead I chose to exit at a completely random point (almost the high of the day). Secondly, no one was stopping me from thinking about my stop before the market opened. I really should have thought about possible entries and resistance levels here.

Summary: Overall this was a terrible trade with a chased entry and a rash exit.

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The second stock I was watching was NNDM (Nano Dimension Ltd., Technology Sector). NNDM was yesterday´s hot stock. For today I expected less interest in the stock and some fade given the fact that many longs were under water. NNDM opened and broke overhead resistance at $2.6 when the market opened. Later in the morning it fell below VWAP however and sold off down to lows of $2.3. I ended up not trading this stock.

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Given my goal of becoming more consistent and improving my risk/reward, today was a terrible trading day. Today´s grade is a F.

Talk to you again tomorrow.

Best,

Nils

Report Card #6

Dear L.,

here is today´s brief report card. Today, I had two main watches. My absolute priority coming into the market was IBO (iBio Inc., Biotechnology Sector).  Today a 1 for 10 reverse split was exercised. As I wrote in previous blog articles, all recent reverse splits were targets of chat rooms and turned out to be great short opportunities. Therefore, I located my shares premarket and expected some action.

Instead of pushing however, IBIO sold off at the market open. What I had expected did not materialize. I did not see any edge in trading this stock and therefore left it alone for the rest of the day.

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The second stock on my watchlist was EDAP (EDAP TMS S.A., Healthcare Sector). After this had closed weak on Friday, I expected a further sell off today given both fundamentals and technicals.

EDAP opened weak, pushed into VWAP and I shorted this move at $3.48. Then I covered the washout into $3.34 three minutes later for a little scalp. I had planned to reattack EDAP for more pushes into VWAP. The tape felt a little off however and therefore I decided to not short any more of EDAP.

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Given the fact, that I followed my plan today and executed my trades quite well I would give the grade C today.

Talk to you tomorrow.

Best,

Nils

Report Card #5

Dear L.,

report card #5 here. Today, I will need to talk about some mistakes that come back and come back. I have written about them in the past, yet they seem to reoccur.

But as always, let´s just dive into it.

AXON

I traded AXON (Axovant Sciences Ltd., Biotechnology Sector) twice today. Going into the market, I was very bearish on AXON and planned to short bounces. Right out of the open, AXON sold off. Having “predicted” weakness I got fear of missing out and shorting the first bounce way too early at $4.77. I should have waited for AXON to go into VWAP. There would have been room to short 10 cents higher. In the past I have written a lot about patience. I think it is necessary to make a clear distinction here. On pump plays which spike fast and crash fast, I think I should chase strategically. However, on fade plays as AXON and EDAP (as we will see in just a minute) the entry is very important for my Risk/Reward. I must not chase in these kinds of circumstances even if the result will be me sitting at the sidelines.

Anyway, AXON ended up breaking VWAP and stopped me out at $5.05. It topped out at the pre-market highs and quickly went below VWAP again. Here, at 9:51 I should have reshorted into VWAP, but the previous loss made me reluctant to do so. I did reshort a little later at $4.92 for the next move into VWAP however. I covered half my position into the flush at $4.72 and the next half at $4.67 later. AXON did end up going lower, reaching a low of $4.33 around 11:30 before bouncing. Nevertheless, I am quite satisfied with this second trade.Unbenannt.png

EDAP

EDAP (EDAP TMS S.A, Healthcare Sector) gapped up on Friday after FDA approval news. Just as for AXON I expected an all-day fade for EDAP. And just as for AXON early weakness made me chase later in the day.

EDAP quickly showed weakness. But due to some reason I did not short the VWAP opportunities at 9:37 and 9:47. Having these missed opportunities in my mind, I decide to reshort into VWAP when EDAP was curling up yet again. My plan was to short at $3.8. However, when EDAP seemed to sell off I once again got fear of missing out and shorted at $3.65, 15 cents below my target. I guess that my fixed prediction of EDAP selling off all day strongly influenced me in this case. My entry was badly chosen and EDAP fought at VWAP for quite some time before selling off down to $3.4. This was around 11:00 and I know that price moves become a lot more random after this time due to decreased liquidity. Howver, given my bad entry and the fact that I thought this would fade all day I decided to hold this longer. I became greedy and put in a stop above $3.85. Well, my greediness quickly was punished and EDAP squeezed above my stop, taking me out for a loss.

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Friday´s lessons are numerous. Firstly, I must not chase my entries on these kinds of setups. Secondly, I should trade the opportunities that present themselves. There were many opportunities according to plan which I did not attack on Friday.Thirdly, I should not trade after 11:00 for these kind of setups.

Based on my emotional behavior I gues my grade today is an E again.

Let´s hope tomorrow will be better.

Best,

Nils

 

Report Card #4

Dear L.,

just a short update. I haven´t traded today. There was one opportunity though which I missed. Today´s target of the pumpers was TNXP (Tonix Pharmaceuticals Holding Corp., Biotechnology Sector). This quickly spiked from around $4 to a higher of $5.11. When it came on my radar, I located shares and wanted to short into VWAP. However, I was a little too hesitant given yesterday´s loss and ended up missing the opportunity. However, the high-volume candle when the high of the day was rejected and TNXP crashed should have given me confidence to short at $4.7. Today I analyzed all recent chat pumps and hopefully I´ll be able to apply the lessons tomorrow.

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Given the missed opportunity I´d give myself a D today.

Best,

Nils

Report Card #3

Dear L.,

Well, what can I say. I feel like the guy in Groundhog Day. Today happened pretty much what happened yesterday too (just that I ended the day red and not green today). I came with a plan into the market, profited small on my first trade and then gave all back and then some. There is to note that today´s losing trade was not emotional though. Rather, I did follow my plan. However, this is not of much use if the plan is of low quality.

But as always, let´s just get right into it.

AMRH

AMRH (AMERI Holdings, Inc., Technology Sector) was my main watch coming into the market today. Yesterday, AMRH had gapped up and rallied, just to fail at the end of the day. In my opinion, the pattern strongly resembled previous price action from the beginning of January. Then, AMRH had been selling off for days after the gap up. I expected something similar to happen today and was short biased.

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My plan was as so often at the moment to short a push into VWAP. And my plan worked. I shorted AMRH at 1.43 and covered a few minutes later at 1.319 for a small gain. At this point in time, AMRH had lost more than 10% on the day and thereby activated short sale restriction (SSR). Since SSR makes shorting more difficult, I decided to be careful. For the rest of the day (until now) I did not like the price action and therefore did not trade AMRH later in the day.

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GEVO

Recent reverse split GEVO (Gevo, Inc., Basic Materials Sector) was pumped by some chat today. When it hit circuit breaker halt, I borrowed shares and formulated my plan. I would wait for the backside and short a bounce into VWAP. After halting two times, GEVO re-opned and directly showed weakness, selling below VWAP. I wanted to be patient and waited for a while. Then I shorted the move into VWAP. Here however I made my first mistake. As I did yesterday, I filled a market order and thus got a terrible fill of $4.71. My second mistake was my exit. As if I had not learnt any lesson from yesterday´s NDRA trade I placed my stop at a completely random point – at $5.1. Would do we see on the chart there? Nothing! Next resistance was $5.15 and this is where GEVO finally failed. It spiked to $5.20 where I got stopped out pretty much at the top. When the weak money, me, was out, GEVO started giving back all of todays gains and traded as low as $3.7.

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Among my trades in UONE, NDRA and GEVO I was always right on the general direction of the market. However, I got stopped out nevertheless.

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If we look at the three charts, we may observe one thing. All three of these stocks, did end up retesting not the high of the day, but previous resistance levels before selling off for the rest of the day. Thus, the conclusion of this post should be, that I have to consider these resistance levels to a stronger degree. While stopping out just above VWAP is fine for some setups, it does not seem as justified for pure pump plays.

Given, that I followed my plan today and did not trade emotionally, today´s Report Card grade will be better than yesterday´s one. However, I also have to consider that I did not take yesterday´s lessons into account. Therefore, the grade is D today.

Talk to you again tomorrow.

Best,

Nils

Report Card #2

Dear L.,

even though markets opened not even two hours ago, I want to write today´s report card. I made three trades and really feel that I should not trade any more shares for the moment. What started as a great day turned out to be pretty frustrating when I emotionally chased a trade. But let´s get right into it.

AETI

Coming into today I had the plan to possibly short AETI (Amercian Technologic Industries, Inc, Industrial Goods Sector). AETI had been yesterday´s most impressive squeezer, going from $1 to a high of $2.6 it had done so however with very unimpressive news. Recently, we have seen many stocks reverse after a strong first day.

AETI opened weak and sold off. When it bounced I followed my plan and sold AETI short at $1.78. Even though it ended up going a little higher, it ultimately failed VWAP and flushed down to $1.68. At this time I was busy with another, even more promising stock. Therefore, I decided to cover at this point.

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Lessons: This report card is all about consistency and RR. In terms of RR, I still did a rather bad job. My stop was at $1.86. Thus, I had 8 cents of risk for 12 cents of reward – this is not even a RR of 1.5. Secondly, at this point in time I should not have two positions at the same time. This only led me to trade AETI badly. Minutes after my exit, there would have been a nice re-short opportunity at $1.7 which I missed. However, I am quite content with this trade for following my plan and of course profiting.

NDRA

NDRA (ENDRA Life Sciences, Inc., Healthcare Sector) is an often-manipulated stock. Therefore, I have been watching this for the past few days. Today it ramped without any news, even hitting a circuit breaker halt.

I was able to locate shares and planned to short the back side. The back side came, and I shorted just below VWAP at $2.9. NDRA quickly washed down to $2.73 where I covered. NDRA bounced. Afraid to give back some of my gains, I did not short the VWAP move. However, NDRA failed yet again and sold off down to $2.5. Now I was quite upset with my trading which led to disaster. NDRA came back and broke through VWAP when being pumped again. However, it seemed week and when it flushed below VWAP I hit the bid and shorted at $2.86. This was such an undisciplined, emotional trade and I received the punishment within minutes when I got stopped out at $3.1. This loss was around 50% larger than the previous gain in NDRA. Even though I am still green on the three trades, the stupidity of this trade makes me question myself today.

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Lessons: My first NDRA trade was well planned and well executed. However, the failure to put the same trade on again a few minutes later finally caused a big loss. I should take these VWAP rejects in the morning again and again. Sure, at times I will lose. But taking this trade 1000 times, I will win most of the time. My second trade was one of the worst trades I have done so far. I chased completely emotionally. Both my entry and exit were badly chosen. Regarding my exit, I did not decide on either a tight stop above VWAP or more room up above $3.2 where the last resistance was. Instead I chose some random level. This again is terrible from a RR perspective.

While I think that I was a little too hard on myself yesterday giving me the grade E, it is fully deserved today. There is a lot to improve but I keep on working on these things.

Best,

Nils