Black Friday – My Biggest Loss of the Year
Dear Penny Stock Millionaire,
In this today’s email I want to highlight the importance of thinking long-term with penny stocks.
I know the idea of thinking long term with penny stocks probably sounds strange … I often hold a stock for no more than a few minutes. At most these days, I hold overnight if all the criteria line up just right.
There were lots of holiday plays during the short Thanksgiving trading week. Interestingly… even though I had the right idea about holiday trading, I had my biggest loss of the year on Friday, November 29.
I’ll go over that trade briefly, but first, let’s take a look at the big picture.
How to Think Long Term With Penny Stocks
Before I explain how to think long term with penny stocks, it’s important to reiterate … hold and hope is NOT a strategy. It’s just asking to have your butt handed to you on a platter. So when I talk about the long term — I’m not talking about buying some BS about a company and hoping for the best.
I’m talking about being able to discern between acceptable losses and gains, over time.
Check it out…
In the past 30 days — after taking my biggest loss of the year on Friday — I’ve only made just over $2,700 from trading. That’s very interesting to me. I didn’t even know it was that bad until I looked. Sometimes that happens.
But if you look at my trades page on Profit.ly and filter for the last 90 days, I’ve made $28,270. And if you filter for one year, I’ve made over $122K.
So it’s not just any one day, week, or month. You gotta think longer term.
More times than not — roughly 75% of the time — I win. But I also don’t force trades. And I don’t hold and hope. Recently, we haven’t really had a hot sector. Instead, we have short squeezes. And now we have holiday spikes, which, frankly, aren’t always my forte.
I’m OK with that. Sometimes, the best trade is no trade. There are times when I go a week without having any profit. It happens. And my loss on Friday was my biggest loss of the year … times three.
My Biggest Loss of 2019
The trade was Can-Fite BioPharma Ltd. (NYSE: CANF). Take a look at the chart from November 29 to get an idea what I was looking at…
CANF chart, November 29: the stock failed to spike at market open, bad execution as I tried to cut losses — courtesy of StocksToTrade.com
This chart shows market activity starting at 7am. The “faded” section is all premarket trading. As you can see, I was dead wrong on this one. Not only did it not spike at the market open, it tanked. And I couldn’t get out fast when I lost my connection. I’m proud of being transparent with all my trades — both wins and losses. So the good news about this trade is that it lets my followers learn a lesson at my expense.
Oh well. A loss is like a breakup. My emotions were a little frazzled. So I wasn’t looking to make a trade after that. I see a lot of newbies and even experienced traders make the mistake of revenge trading. Don’t do it.
How My Big Loss Played Out
The trade was a loss because I was wrong on the stock. But — and this is important — my mistake was compounded when I couldn’t get a sell order executed.
Maybe you’re asking, “Why didn’t you just cut losses quickly like you always say to do?”
I tried. I’m trading from Japan and for whatever reason my software lost the connection. Maybe it was my Wi-Fi connection or maybe it was a broker thing. Who knows? That’s out of my control.
So I was wrong, but it should have been an $800 or $1,000 loss. That still would have been my worst trade of the year.
But it was double that size based on my travel. Which brings up a very important idea. This idea is so important because once you get it you’ll realize how easy it is to move on from a loss like I had on CANF. Check it out…
I’m Happy to Pay a Freedom Tax
I think of trades like this as a freedom tax. Or a travel tax. I could make more money trading by sitting in an office in New York and trading all day. But I would hate it. I literally trade from all over the world.
I get to travel, meet amazing people, eat incredible food, and do charity work.
So if I occasionally take a loss like this, it’s no big deal. That’s trading sometimes. It’s frustrating, but you just gotta learn to deal with it. Especially if you really want to experience freedom.
What I Said in My Premarket Watchlist
The crazy thing is that while I was losing on CANF, ASLAN Pharmaceuticals Limited (NASDAQ: ASLN) was spiking big.
One of my followers tweeted at me and said
“In $ASLN at $6 out at $6.74 for 12%. Holiday trading on a Friday awesome time. Remember guys be smart and take the meat of the move. Like@timothysykes says singles add up over time. So thankful for studying and not trading as much lately.”
And it was the exact price action I wanted for CANF. It was the exact price action I described in my premarket watchlist. So I was right on track, but I chose the wrong stock. Then I compounded the mistake with the software issue.
Here’s what I said in my watchlist on Friday…
CANF has a history of failed spikes so be careful chasing it.
Remember today is a shortened trading day so holiday trading rules apply. Stocks can spike MUCH more than you realize and it can happen quicker than you realize, too. So be on guard and be safe… because these stocks can crash faster than you think, too.
Which brings me to a reminder and hint about another upcoming post…
Holiday Trading Is Here
As I post this, holiday trading is upon us. Historically, people go in and out of the market during December. But especially around Thanksgiving and Christmas, you get many more wannabe traders. And they can create these ridiculous holiday spikes. So be ready.
With that in mind, I’m writing a post about holiday trading. In it, I’ll give several examples of holiday spikes from Friday. Hopefully, it will help you prepare for potential holiday spikes around Christmas. And also the January Effect. Keep watching for an email about that one — it’ll be up in the next few weeks so you have plenty of time to prepare.
In the meantime … if you haven’t read “The Complete Penny Stock Course” you need to — right away. It’s the only book with all the foundational knowledge you need to get started. I didn’t write it, but I recommend it all the time — it’s that good. If it’s not sitting dog-eared on your desk, you haven’t read it enough. Seriously.
That’s another trading lesson in the books. I hope these stories inspire you. My goal is to be the trading mentor to you that I never had. But I also want to show you what’s possible when you choose to live the life of your dreams.
Travel, amazing food, amazing people, giving to charity… it’s all there for you. But you gotta be willing to put in the time up front to enjoy the benefits later. There’s no easy button. There are no shortcuts. Get on it.
Editor, Penny Stock Millionaires