As always, let me preface by saying that this is not investment advice, but this is about my investment strategy and journey in trading stocks.
Summer vacation was nice and the Arkansas mountains were
lovely. Remember, stocks are a means to
an end. You just have to take a break to
renew, relax, and refocus. That is a
little tricky when you have been in a stock position for a couple of weeks and
you are riding a downhill roller coaster.
I filled my cart with Humanigen stock (HGEN) on June 25th for
18.15/share, and then watched it take a nosedive to 15.76, but yesterday in the
pre-market, woohoo, boy was I happy! It
shot up to 20.00 and I knew it was going to be a good day.
“I was right on top of it, and sold for a 10.2% profit
before the market had even opened” is the sentence I would like to be true. However, I believed it was going to just keep
going up all day as a breakout event. It
didn’t quite work out that way. Right
when the markets opened, it went right back down to the lower 16’s and finished
off just above 17. Reality is that I
missed a great opportunity and it cost me 10.2% profit and left me in the
negative still on a position I have been in longer than I wanted to. Longer than my strategy calls for, which
means my growth rate is postponed…again.
Investing is hard work and it takes an emotional toll on you
sometimes. In manufacturing we focus a
lot on continuous improvement. No matter
how good you do something, there is always a way to make a more defect-free
product for less money in less time. After
I realized my mistake yesterday, I read some good advice: Always sell during a gap up if it is in
the pre-market. I am adding this to
my investment strategy. There are few
records kept of the pre-market and after-market price swings, and those do not
always show up. On the WSJ website, it
shows a range of 16.57 - 18.675 for yesterday. No mention of the 20/share price. Since it was pre-market, it wasn’t
official. But I have bought and sold in
the pre-market before and there are no extra fees, penalties, or criteria for trading
in the pre-market. Anyone can do it, but
you have to set up your Ask for Extended Hours AM and PM. In TD Ameritrade, it looks like this: GTC+EXT.
Good till closed plus extended.
You can cancel or modify as you wish, but if you do not have extended
hours selected, you will not sell or buy at a limit price during the pre-market
or after-market.
Don’t beat yourself up for the missed opportunities. Just by nature there will always be more
missed opportunities than the one path you take. Instead learn from them and next time you
will have one more tool on the tool-belt that can help you steer clear of the
investment potholes. I am confident I
will sell my Humanigen stock for a profit soon, and next time I see this set-up
in the pre-market, I will be ready.
-Johnie
