I feel for all the traders out there restricted by the pattern-day-trader rule. 

Pre-market: CATB was nicely spiking pre-market today and also saw some bounce over VWAP. I entered the trade with a solid risk-reward (3:1). However, the trade started going against me and I was soon red with almost a -10% on my position. I cut my losses quickly to avoid any further loss. 

On Market Open: The stock opened red but soon spiked to 3's within 1 hour after open. A lot of short squeezes in there for sure but also many who expected the same move as I did. With just 1 trade left in my 3-trades-in-a-5-day-rolling-week (PDT), I decided to sit back and watch the stock spike to my planned level. This can really hurt.

Analysis: The stock was in a hot sector with high volume, no news but a lot of hype. It had gapped down a few weeks ago from mid 5's to mid 1's. Today was the first day after weeks that the stock had higher volume and good spike (+35%). Since the stock did not move the way I had anticipated pre-market, I decided to "let go" one trade from my 3-trades-in-a-5-trade-rolling week (PDT). After experiencing the pre-market loss, I decided not to get greedy and watch the stock instead. To see it spike on market open and move as anticipated always hurts.

However, I am happy with 3 key lessons from this trade - 

1. It was the right stock to trade

2. I cut losses quickly and followed the plan

3. There is always another trade

 

-MJAIN