It all started with what could've been a nice single...Breaking news play, contract winner, former spiker with PR and a 37% spike in price so far. I bought it mid-range off its high of 0.016. I was waiting for a bigger dip but it consolidated for a few minutes and looked about to spike. 

And it did spike...on very mediocre volume...but a spike indeed. It even hit my 10% goal. I saw SirGhoul15 take a nice little single on it but I didn't take my chance. About 10 minutes into the trade it had spiked up to a HOD of 0.0159 at 1:01PM and fallen back down to my entry point. I made a note in my notebook that reads:

$BCNN - 13:07 EST - should've taken my 10% and ran. This was greed. As punishment I must sit in discomfort and HOPE!

(thanks Androo and Himmeny...I'm always journaling my thoughts when I'm in a trade now)

At the time of my note the price was back at my entry but there was zero volume trading. I was one of the larger position sizes so if I was going to get out I would have to sell on the bid, which was at about 0.0120 if I remember right. It's pretty crazy when I think about how my little $1500 learning account made me the big player in this stock...there's a red flag if I ever saw one!!! So I waited...hoping...and the whole time I knew it was wrong. I wasn't hoping for a profit any more, I was hoping to get out at break even! I am on a streak of very disciplined and well planned trades, it really hurt my pride to lock in a dumb one like this.

When I prepare to enter a trade, I use a spreadsheet called my Trade Entry Worksheet. It has the Sykes Sliding Scale to rate the trade and a spot to put in my entry price and it calculates what my 10% goal is and what my 2% loss is. The 2% number is in red and that's my stop. The 10% goal is conservative with a lot of spikers, but SINGLES ADD UP! I've heard it a thousand times from Tim and I believe it! I have a spreadsheet on my wall that shows how growing my trading account just 5% every day would result in my initial $1200 growing to over $100,000 in 91 trading days. I'm happy with that! So why would I ignore a 5-10% win on an illiquid little OTC when trading midday on a Tuesday!!!???

So did I cut my losses quickly? No! I "added on the dip" and held overnight. I was down 18% at that point and I wrote in my journal:

"Missed my chance to cut losses quickly and am praying for a gap up after the news spreads. If "hope" is a four letter word in trading...what is "pray"...I will never allow this to happen again."

At that point I knew I had failed on many levels and broke several trading rules. My hope wasn't for a win...just a smaller loss. My biggest win at this point is $422.87 on FAGI. I didn't want a loss that was bigger than that. But it's time to end this shameful chapter and move on.

My lessons learned:

1) Cut losses quickly

2) Avoid trading midday unless there is so much volume and momentum that my trade is a tiny drop in the bucket of shares being traded.

3) If there isn't record volume pushing a stock up, take my 5-10% when it hits. Only hold for more than 10% if the momentum is undeniable.

4) Cut losses quickly

5) As soon as the pattern is broken exit the trade

6) Cut losses quickly

7) Don't add to a losing position, only add if a trade is working and a better opportunity for a better price presents itself

8) Don't guess the reaction to news

I am ashamed of my performance on this one. I knew I had broken the #1 rule to get into the situation and I thought that since I missed my chance to cut losses quickly it didn't matter how long I waited. That was my biggest mistake.

Lesson #9 is to cut a trade as soon as I realize I'm wrong no matter what the price. NEVER let this happen again. This blog post is going on my wall facing me at my trading desk. I hope people don't think too badly of me for this trade. That's my biggest worry. I don't care about money or success, I just want to be a solid trader and a good member of this community.

Thanks for reading and trade safe. And CUT LOSSES QUICKLY!!!