A 500% Short Squeeze Just Happened!
Hey everyone, Ross Cameron here, and I’m back with another trading recap! In the world of day trading, every day offers a new set of challenges and opportunities. Today was an eventful day for me thanks to a stock called WISA, which turned out to be both a major winner and a stark reminder of the volatility inherent in the market. This blog will walk you through how I identified WISA, executed trades, managed risks, and the lessons it taught me. Let’s dive in!
Finding the Right Stocks
To kick off my trading day, I rely heavily on several tools and scanners to pinpoint potential stocks to trade. Here’s how I spotted WISA:
Continuation Scanner
My first tool is the continuation scanner, which identifies stocks with significant price ranges over the last two weeks. WISA caught my eye here; although it wasn’t the top mover, its high volume stood out, suggesting strong ongoing interest.
High of Day Momentum Scanner
WISA appeared on this scanner around 7:28 AM. This tool helps me track stocks reaching their peak prices throughout the day, which is crucial for capturing momentum-based trades.
Top Gainers Scanner
This scanner showed WISA as one of the top gainers. While it wasn’t leading in percentage gains, its price point and steady climb made it an attractive candidate for trading.
Understanding the Catalyst
The driving force behind WISA’s activity was a news announcement from the previous day. This news created a buzz, and today served as a follow-through day, where the initial reaction continued to play out, offering more trading opportunities.
Analyzing the Chart
Before diving into trades, assessing the stock’s movement patterns is crucial. Here’s my approach:
Daily Chart Review
Yesterday, WISA had a significant upward movement, creating expectations of a potential gap fill which could lead to profitable trades. The stock had previously struggled to break past $9.50, which it finally did, setting the stage for today.
Intraday Chart Review
This morning, the stock showed promising activity, moving from $5.50 to $7.00 before pulling back. These movements were key in determining my entry points. I also drew a support trend line which helped me visualize the stock’s trajectory.
Trade Plan & Execution
First Entry
I started my trades around 7:30 AM, buying 2,500 shares at approximately $7.37. My strategy was to capitalize on breaking through the half-dollar mark at $7.50, hoping to ride the wave up.
Adding to the Position
As the stock price fluctuated, I keenly added to my position, each time adjusting shares and taking profits at peaks. My confidence grew with each successful trade, allowing me to increase my stake significantly.
Aggressive Entries and Scaling Up
By being aggressive, yet mindful of the risks, I was able to maximize my returns. However, this strategy also led to some of my largest losses when the stock turned volatile.
Managing the Decline
Despite the gains, WISA showed signs of pullback, which I initially countered by buying dips. However, these trades started to show diminishing returns, and I had to make quick decisions to cut losses. All said and done, I was able to lock in about $6250 on the name, which felt great.
Lessons Learned
Today’s trading underscored several crucial lessons. In the heat of the moment, it’s easy to get caught in the action and overtrade. Today, I found myself making more trades than usual, trying to capture every possible gain, as I felt like the opportunity was definitely there.
Importance of Risk Management
Setting a daily goal and sticking to a disciplined trading plan helped me walk away with profits, despite some setbacks. Recognizing when to step back is vital, especially after a few losses.
The Mental Game
Day trading is not just about strategies and analysis; it’s heavily influenced by psychological factors. Managing one’s emotions during ups and downs makes a significant difference in overall performance.
Final Thoughts
Today was another demonstration of how volatile stocks can be when day trading. While I achieved a substantial profit, the potential for even greater earnings was definitely there. However, trading carries risks, and it’s crucial to manage these wisely. Remember, my experiences might not be typical, and every trader will face unique challenges. Always consider your situation and risk tolerance before diving into day trading.
In conclusion, trading is as much about managing oneself as it is about managing the stocks. Each day provides new lessons and opportunities to improve. Here’s to many more successful trading days ahead. Happy trading!
A 500% Short Squeeze Just Happened!
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Warrior Trading was founded by Ross Cameron in 2012, and is now a thriving community of thousands of traders. You can learn more about joining the Warrior Trading community here.
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