Good, not Great, Trades
I took a trade while out in California. I tried to do it on my phone and take a hands off approach.
I got short this QUBT at 7.4 the day it peaked at 9. I added the next day to lower my average to 7. Although I felt high conviction the top was in, the stock did not want to trend cleanly and respect early highs. I lowered my stop to intraday highs. It reversed sharply from the FRD (first red day) lows and ran said highs to 7.30, I stopped out for a 7500 loss. You can see how low my risk is compared to the previous trades I've blogged about. I thought for sure we'd visit a 5-dollar handle within a few days. Then it started to trade in a wide range for the rest of the Thanksgiving week... today, on Tuesday it finally met 5... just needed more patience.
It's good. Not great.
Although I've been avoiding small cap, QUBT approached 1 bil in market cap, had ample volume and tight spread, and wasn't HTB on Fidelity. It used to be OTC trash and that's a huge negative quality factor (which is good, for shorting). Traded from 1 to 9. Yet despite filtering out for high quality mean reversion factors and being mostly right on my timing, I lost because I didn't want to tolerate risk in the market and having multiple swings in/out of the money on my entry.
Today I shorted SMCI. It's been nearly a triple since the lows with company responses. It's the usual story of a battleground stock--hype highs, horrible lows, and then the recovery becomes a mini mean reversion play in itself. I got short too early, lost 5k... felt kinda bad about it--"should I be shorting good but not great plays, at this time in my life?" I kept at it. 10am highs settled in and there was a weak candle at 10:10. What's sad is that I visualized this exact scenario but I decided to trade like 2023 Pete and spazz too early and then recover. Anyway. It flushes clean. I covered 2/3rds too early into the low flush because I didn't trust the followthrough to sub $40 enough. Covered last batch 40.80. Battled back to be green 13k. Got long at 39.20 for fun and made 900.
IDK. Are these worth it? Am I executing well enough to make the most out of them? Am I trusting them enough to hold size to targets? Mixed answers there. There's less margin for error vs. the GREAT trades like MSTR.