Trading is tough because 90% of today I executed well, made incremental progress, avoided many of the errors I am ironing out of my game and took good spots as they came up. Prior to the upcoming $LUNR headline, I was even on the day after having just given back my gains in a single large error in $DXYZ.
An hour before the close a headline came out: “NASA announces Firefly ($FLY) Elytra spacecraft to deliver first drones to Moon at today’s moon base conference (only public space co. awarded). Earliest mentions ~1:40 PM Central Time.”
$LUNR started tanking on the news that $FLY would be picked instead.
It had already dropped 7.5% and started to rebound by my first entry long:
In retrospect, I should have paid more attention to several factors I was aware of:
1) $LUNR is a $2B company and thus can have extreme price swings off news (greater than 10%+)
2) Space as a sector has had massive market cap expansion on very speculative companies that gives a lot of room for sharp pullbacks
3) Sellers were clearly in control and the sharpness of the move (-8% in 4 minutes) was abnormal and indicated a larger imminent drop was on the table.
My first error was not puking my long MUCH faster- as soon as it swept down. There was a ~5 second window where I should have gotten out.
By the time I puked (and flipped short) I had already lost 6% of my position size.
My next error was mistaking a halt for another type of order flow and exiting my short and getting long.
Getting long into a limit down halt in a paper thin stock nuking down off a single headline is just about the worst thing I can possibly do . . .
This halt then double halted which typically precedes a larger gap down.
By the time the halt resumed, I was now thinking ok, this is capable of making a substantial retrace, I’ve seen this before. The speed at which it halted down often is followed by a recovery in stocks that aren’t nanocap shitcoins.
It recovers 5% after the halt resumed then breaks down again; at that point I hit out.
THEN I re-enter short aggressively, puke the top of the following consolidation.
Get short AGAIN aggressively, puke the top of the following consolidation.
And finally flip long after price (and order flow) was surprisingly resilient, thinking it signalled a broader recovery, and puked as it began to move out of the consolidation lower.
This is ugly, I won’t lie.
How would I change things if I were to have a do-over?
Well I’d broadly try to get short at one of these circles and hold until it formed its first extended consolidation (taking profits if it retraced up and out), holding through the limit down rather than exiting as it entered a halt. And if I had taken my first entry, to puke it when price broke below the prior low.
This is the kind of trade I want to nail. I was in the symbol almost immediately and went 1 for 5.
It turned out that my shorts following the halt resuming would have done great- if I had entered from the top of the consolidation and held, rather than shorting from the bottom of the consolidation and puking its tops.
These two mistakes are mistakes that I make over and over again. Not puking quick enough and aggressing from the unfavorable side of a consolidation, puking when it ranges to the edge of the other side.
Overall I’m happy with showing up today. I’m happy with taking reasonable clicks for most of my day.
I’m happy with documenting my trades and reviewing them. I’m happy with being in good symbols at good times. I’m happy with waking up early and doing my morning routine before starting to trade.
I’m happy with deciding to forgo trading the MOC after these disastrous clicks in $LUNR and similarly flustered clicking in $FLY and $RKLB.
This was just one rep during one day during one week. I’ll be back again tomorrow.
