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$UUUU – Energy Fuels Inc – 2nd Day Play

$UUUU was up big yesterday and I was looking to capture a continuation of the move. It opened above yesterdays HOD and sold of in first 30 minutes before bouncing and basing. I bought my first tier in the first minute at $3.61 to establish a position in case it ran – this was sorta half a FOMO move, and also a reasoned decision.

I picked up my second tier at a shallow pullback target in the 4th minute at $3.50 – which turned out to be too soon as it continued pulling back to $3.25. I put my stop in for one tier just below support at $3.32, which turned out the be solid and didn’t get hit for most of the day.

I still liked the play and was wondering if there’d be continuation again tomorrow, as it consolidated all day and didn’t hit my stop until the very last minute of the day. As it turned out, there was continuation the next day, but I didn’t take profits as I should have. I waited and waited and wondered if it’d continue another day, which it did not. I was moving my stop up each day it advanced, and was eventually stopped out at $3.84 on 8/9 for a small gain.

This was my first attempt at an intraday trade, and it spilled over into a swing trade. Part of the issue was my position was too small to give meaningful gains or losses, and my curiosity outweighed my discipline. There were two times that, if I had been holding a larger position, I would have taken profits, but didn’t.

Lessons learned: Stick to your discipline and take profits, even if small, when targets are hit. Don’t turn an intraday trade into a multi-day swing trade just because you’re curious if it’ll keep running.

Review: I felt good about the trade, despite being a push, as it showed my instincts are pretty well tuned. I was looking for confirmation of ideas, which I got. Only being able to trade the first hour of the day is quite a handicap, and I’ll consider putting positions on in the morning and then trading out of them during the afternoon. I’ll need to take a break from work maybe 20 minutes before market close so I can review and close intra day positions. This was also my first trade with increased size – I added a second tier to my buys, which I take as a step in the right direction and a small victory in and of itself.

This morning I did three trades: two “good” ones and one “bad” one.

The first trade was the “bad” trade in AMD, where I FOMO’d in to buying near the ATH after a pretty big run whose energy was starting to wane. I tried to play the bounce, but set my stop too tight and didn’t stick to plan to buy if broke 19.2. Missed it and tried to grab on the way up from 19.68, finally bought at 19.75 and it peaked at 19.88 before trading back down and stopping me out.

The second trade was also in AMD where I got in at VWAP and was playing for a bounce that didn’t happen. I got stopped out just under VWAP, where I had set my stop too tight, and it ran up a bit over before returning to VWAP.

I set the first stop at a good point, confirmed the downtrend, but the second stop was set too close to VWAP where it pipped and popped from there. I didn’t have my indicators on when I jumped in – no VWAP, TTM, RSI – because I was too eager to get in. 🙂 The market was trending down, SPY/WIM/QQQ were all down, and I should have reversed my position and gone short. I also couldn’t trade AMD again for 4 days because I don’t have a large enough balance to be considered a pattern day trader, and TDA would have locked my account.

The third trade of the morning, NCR, was in play from the SMB Radar screen at 8.2. It had been there for an hour or so, with TTM levelling off about 8 up bars and bought at 28.49. It hit a consolidation phase, with the uptrend continuing, and I set my stop at 28.35 looking for a pop. I got a little one, with the RSI at 58 and fairly flat. The play was right, the move was right, and I was holding until Reason2Sell. NCR was trending up slowly, pulling back to higher lows and pushing up to higher highs in a tight range. TTM was staying postive, pulling back a bit but fairly flat too. I was being patient, sitting back and watching as NCR continued to stair step up. Volume decreased to less than 10k, flat chart, flat TTM. SPY at LOD at 282.75, and NCR started slowly trending down. I moved my stop to below VWAP as SPY started to turn around at 9am MT, approaching lunchtime in NYC on a summer Friday. NCR was fighting going down, with flat flat flat bars, volume under 5k, and no liquidity. SMB Radar still had it at a 7.5, #4 on top, when I stepped away to go to the bathroom.

When I got back, the dam had broken, and NCR had tanked fast, hitting my stop below VWAP. The SPY/QQQ/IWM were all up, so the move didn’t correlate with the larger market. In hindisght, I could have gotten out at with a small profit which felt like the top in my gut at the time, but I stuck with the trade to see how it developed. It was a good trade, a good exercise, and good for patience, which I still need to work on. However, I didn’t take profits when I sensed the turn in the stock, mainly because they were so small, and I need to remember that small gain is better than a loss. That said, I was working on practicing staying patient, which I did pretty well, and so I consider this a “good” trade – I set my target and stops and waited for it to develop.

• The markets are not random.

• Don’t get caught in a situation where you can lose a great deal of money for reasons you don’t understand

• Patience – wait until a trade is so compelling that you can’t stand the thought of not taking it

• Focus on maximizing gains over number of wins

• Preserve capital and wait patiently for the right opportunity to make the extraordinary gainzz

• Expect the extreme! The unexpected and impossible happen from time to time

• Maximize profits, cut losses quickly

• If you have an edge (and you have to have an edge), be ready and willing to bet the house on it

• Never hold a position that gaps against you right after you put it on

• There must be a non-random pattern, and you must identify and trade it appropriately

• Trades that are difficult to take are often the successful ones

• If the trade goes wrong, how do I get out?

• You can’t win if you’re trading a leverage size that makes you fearful of the market

• Know when you’re getting out before you get in

Gleaned from The New Market Wizards: Conversations with America’s Top Traders by Jack D. Schwager