Trade $BIEI

The lessons I will be discussing in this post will be directly related to the trade I made on $BIEI on the 10th and the 11th. This will detail a bit of the trade as an analysis but won't be a complete analysis as the focus of this post is the lessons learned. 

1) Trading sub penny stocks - NO

I traded this stock for the second time against my gut, due to hype in the chat. Although multiple lessons can be drawn from this one, the specific one I will be talking about is why I do not think trading stocks priced at such low levels is no longer something I am willing to do. I bought $BIEI on some consolidation expecting the next "Uptrend". I bought shares at 0.042. Now on the list of reasons why this was a HORRIBLE trade to begin with, the one I want to focus on is what it did over the next few hours. It basically had horrible and boring sideways action for a few hours after i bought it, fluctuating very minimally. However I was trading on the first off day from work, and ended up falling asleep. I had a mental stop at .037, which was already surpassed, and I got out at .031. This is why I will no longer trade stocks like this, because this .01 loss cost me a 20%, not acceptable. To make matters worse, most my position would not execute. I rechecked the charts, saw the pattern, and realized it wasn't looking any better. My remaining position got executed a day later at 0.028. My first big loss. Its hard to become comfortable trading a stock where a one cent change will cost you a quarter of your position. And that's something I'm no longer willing to trade.

2) Don't let the fear of missing out ruin you

I was afraid to miss $BIEI which was absolutely ridiculous to do because I know it isn't the next $KBIO with an %8000 run up. It was a standard trade in which I was hoping for 7-10% profits and I was going to exit. However, I saw a few mailers on this stock, it was in the chat room, and I traded it thinking I would miss a pump. Trading like that cost me 20%. 

3) Humility is key

Posting this took me a few days. Im embarrassed and I feel like an idiot. Always easy to do retrospectively, this trade shouldn't have happened. What is irritating to me, is that I was analyzing trades and was sitting out trades because every variable wasn't there. Some of these trades had 50-60-70% probable profit rates but it wasn't good enough, I wanted EVERY variable there to trade because we should focus on the best trades, not mediocre trades. I then proceeded to trade the worst possible trade with no probable profit. Why? I still haven't figured it out. Im learning. I'm still new. I acted purely on emotion. 

4) Don't buy mid range, on a down trending chart

This is literally what I did. And I didn't notice it until it was too late. Like Tim has taught us, to minimize our risk, we need to be buying/shorting at the ends of these ranges. Buying and shorting mid range doesn't help us, cuts our profits, and maximizes our losses. Which is why I lost over 20% on this stock. 

5) Trading your entire portfolio 

Now there can be arguments on how much of your portfolio you should trade. Never, ever, ever trade your entire portfolio. Even if it is only 500 dollars. This is a weird line that has to be walked with extra care, because in order to profit, you must be trading enough capital to provide you profit. So if your entire account is only 500 dollars, you have to invest that entire 500 to even profit. But the catch is, when you lose 20% like I did, You're still losing 20%. The risk:reward is very very very skewed when you risk your entire portfolio.