So I'm writing today to talk about screwing up. I've been riding high recently, mostly on my investment in Visa (V.) This made me cocky, and also stupid. I decided to try some swing trades, pretty much going off of nothing. Let's just say I learned a lot.
Here is the situation:
Kodiak Oil and Gas Corp. (AMEX: KOG) is a pretty volitle little stock. Its way up this year, but I looked at it after it hit $4.00 a share, a recent high. From there I 
figured it would drop, which it did from the beginning. However, it kept dropping. I was looking for an entry point, and I bought soon after the mega drop (see chart 1) at $3.60 and $3.72. I sold some shares right before close at just about $3.80.
figured it would drop, which it did from the beginning. However, it kept dropping. I was looking for an entry point, and I bought soon after the mega drop (see chart 1) at $3.60 and $3.72. I sold some shares right before close at just about $3.80.Pretty sweet right? Nice 5.6% gain in under 2 hours. But the problem was I got greedy. I kept a majority of shares waiting for $4.00 again. I watched shares the next day open at $3.60 settting off a my stop sell order at $3.70. Ouch.
It doesn't end there. I figured I had avoided much of the worst, and so I kept watching the stock. On Tuesday I watched shares continue their demise, and waited for a entry point. After seeing the trough at around $3.40 for about 30 minutes (see below chart), I missed the boat and couldn't get a price below $3.49. I wasn't worried however, because I was counting on a return to $3.65-3.70 and making up my losses from the day b
efore. However, shares didn't rise above $3.55, and I ended up keeping shares overnight (BAD IDEA.) I missed selling at $3.60 the next day, getting really greedy, and came back a little later to see prices were wayyyy down. Today I'm looking at KOG pricing between $3.25 and $3.40. Pretty sucky.
efore. However, shares didn't rise above $3.55, and I ended up keeping shares overnight (BAD IDEA.) I missed selling at $3.60 the next day, getting really greedy, and came back a little later to see prices were wayyyy down. Today I'm looking at KOG pricing between $3.25 and $3.40. Pretty sucky. This is the epitome of crappy, stupid, pathetic day trading at it's worst. I gave up taking 5.6% gains in favor of chasing more. Then I tried to win my losses back by trading the same stock in the same way, and not taking gains when I had them. DON'T LET THIS HAPPEN TO YOU!!!!!
My strategy for these trades was sound. I looked for waining negative volume, bought at a low price and watched the price grow, however, I got greedy and couldn't sell for a small gain. Now I'm faced with stupid losses, and have to either hold onto a stock like KOG, or else sell for a sizable loss. Lesson: Be smart with swing/day trading. Remember, if you make just 1% a day after fees and commissions, your making over 200% a year.
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