Capitalizing on a 300% Stock Surge
Hey traders, Ross Cameron here! In the fast-paced world of day trading, every day brings new challenges and opportunities. Today, I want to talk about my experience with profitably trading a stock that surged 300% in a matter of minutes. Following a meticulously laid-out game plan, the execution was almost perfect. Despite the slump in the overall market, my trading performance stood solid, kicking off April with a bang. Let’s dive into the case study of VSTE, the star of today’s show, and unpack the strategies that led to a successful day of trading.
Finding Stocks to Trade
The discovery of the day’s big mover, VSTE, happened during my routine scan at 7 a.m. When I saw that the stock was surging up over 180% in the premarket, I was immediately intrigued. My initial steps involved checking the floating shares and the price, two critical factors that gauge a stock’s day trading viability. My preference leans towards stocks with less than 20 million floating shares, ideally even under 5 million, and a price bracket of $5 to $10. This meant VSTE was right in my sweet spot.
Chart Analysis
Looking into VSTE’s daily chart revealed an bullish pattern: a recent IPO with its all-time high standing at $14. These stocks often present a compelling narrative of a potential turnaround, making them prime candidates for a bullish run. However, the risk of insiders selling post the lockup period is something to watch out for. For VSTE, it was past the initial 90-day caution window, indicating a green light to me for trading.
The intraday movement of VSTE was a spectacle, with a meteoric rise from $4 to $13 in just a 5-minute window. Yet, such an explosive move often necessitates a pullback, with the volume weighted average price (VWAP) and the 9 moving average serving as key indicators for potential entry points. Despite the huge spike, the extended distance from the 9 moving average cautioned against immediate entry due to the high risk of a pullback.
Trading Strategy
Starting with a modest position size allowed me to build a cushion, minimizing risk while scouting for momentum to ramp up my share size. The goal was clear: secure a $1,000 profit and then strategically increase my position size. The trade began with a cap of 5,000 shares for the initial trades, a threshold set to manage risk while working on building a cushion for the day. As my confidence and profit builds up, I increase the cap to between 10,000 and 15,000 shares, depending on my cushion and the market’s momentum. Yet, experience reminds me of the importance of scaling back as the prime trading window starts to close, a tactic to safeguard gains. All said and done, I managed to lock in a profit of nearly $5000 on VSTE, which was close to my daily goal. It was a testament to disciplined trading.
Emotional Management
Day trading is not just a test of strategy but also of emotional resilience. Past encounters with emotional trading taught me the hard truth about the dangers of being led by feelings rather than logic. Incorporating guided meditations into my routine emerged as a powerful tool in maintaining emotional equilibrium, ensuring that decisions are driven by strategy, not impulse.
A trader’s readiness each day is vital. Regardless of how well yesterday went, each day demands a fresh assessment of physical and mental readiness, alongside the quality of available setups. Patience is paramount, as forcing trades in suboptimal conditions is a recipe for setbacks.
No trading day is without its lessons. Reflecting on missed opportunities and reaffirming commitment to the laid-out rules underscored the day’s takeaway: discipline is the cornerstone of successful day trading.
Looking Ahead
Moving forward, the focus is on sharpening emotional control and discipline, with the aim of navigating through April without succumbing to emotional trading. The goal is clear: maintain discipline, adhere to the game plan, and keep emotions in check.
I hope this recap inspires and educates, providing valuable insights into day trading. Keep an eye out for more content like this, and happy trading!
This was today’s MOST OBVIOUS trade
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