A quick review about a trading mistake I made last week to learn from.

I shorted 5k NLST at 5.70 on friday a.m. which was a fair trade at the time considering it’s run up.  It closed the prior day at 5.67, and hit 5.60 after I made the trade to go red in pre-market.

However, as soon as it hit pre-market low, NLST just started to march up pre-market.  My mental stop was 6 bucks, and NLST broke that on volume.  Here is the mistake, the prior days high was 5.95, I even told myself and others if NLST broke 6 I was going to cover and buy long because it was going to breakout.   So instead of taking a loss at 6, I MOVED MY STOP to 6.50 hoping for a pullback.  When it gets to ‘hoping status’, the trade never works.  So, in summary, I lost 4k on a trade I should have lost 2k.  This is a trading mistake.  It could have been even worse because NLST hit 8 bucks, so obviously, did not turn out to be a terrible mistake, but wanted to point out how moving stops, which I rarely do, never work.  I even knew when I moved the stop I was losing, so hopefully this is a good lesson in loss.

Also, a quick note about the shortened thanksgiving week - during this time I usually dabble in highly speculative stocks.  Reason being, the week before thanksgiving is usually thin trading, and the traders are out in full force this week, you will see.   So my idea on the DRAM trade on friday at 3.50 was a solid one, and the type of ‘sexy story’ that may work during a speculative thanksgiving week.  I will point out the speculative action which and when I see it.  Good luck -

Welsh