Shared by
tombro
My worst trade in a long time. Hopefully the worst trade this year.
The stock was extended-but I was thinking how much KITE moved yesterday so gave it a shot.{{I just checked tho, KITE "closed" yesterday up 15% from the previous close}}
I should've traded with less shares (if at all). It had already moved over 20 percent, there was evident selling from the 3 red bars out of the previous 5(and the nature of it's price movement had changed), and was still $.68 away from the EMA.
Another main mistake was not immediately putting in my stop, and by the time I did it had already moved past it. Then instead of hitting the bid I tried to limit out at 37.39 to cut into the spread.
My stop would've been at 38.59 ($144 loss)
Worst case scenario with this stop would maybe be an exit a minute later at 38.07 ($248 loss)
My exit was 2x this worst case scenario.
The main lessons of this trade are DON'T CHASE!!!, and that I need to constantly be thinking/working on using the best order for the situation, and even tho the spread on this stock hurt, in this case I should've just used a market order. My stop would've been a market order, and that's what I wound up using anyway.
The area of my stop would've been a great entry for a 1-2-3 short
Entered a Limit order for $34.45 @2:48PM but didn't get filled and didn't chase
Execution detail:
| Date/time | Symbol | Side | Price | Position |
|---|---|---|---|---|
| 2015-01-06 10:51:29 | FGEN | buy | $39.310 | long |
| 2015-01-06 11:00:36 | FGEN | sell | $36.831 | 0 |
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I'm brilliant after the fact but if you look at the 30 min, it was way overextended and very far from the ema. I found that my probability of winning in that situation is minimal compared to the risk. The stop should be as soon as it broke those lows on the 5 minute. That might not always be the case. Sometimes I agree you have to give it room. However, in this case with it so overextended, it should be an immediate exit.