A Lack Of Momentum Leads To A Lesson In Patience

Despite early hopes to the contrary, it looks as though September is going to end up as a relatively flat month for my trading account.

Although there was some strong action coming out of August that carried through the first week of this month, my profit/loss over the past three weeks has been essentially flat and I’m only up on September by about $15,000. Still, given the complete lack of opportunities I’ve seen recently (I sat out two of the past five trading days), I’m happy to be in the green at all.

My typical strategy just hasn't gained traction in this market, something that was hammered home during a rollercoaster trading day this past Thursday, which I ended $3,000 in the red.

I started out the day with a small $6.00 win in Sonim Technologies, Inc. SONM, which was a frustrating way to start the day.

I really got on the wrong foot in my late-morning trade on Precipio Inc PRPO, which popped onto my high-of-day momentum scanner around 11:00. Because I was hesitant to keep trading the tail end of my usual two-long window after the open, and due to the fact that the lack of momentum has stymied my strategy for the past couple weeks, I initially decided to hold off.

When PRPO jumped again after a brief period of consolidation to near the $3.00 mark, I decided to take a chance. Unfortunately, my initial orders got rejected, so I missed the move above $3. I then decided to take another stab as the stock was closing in a circuit-breaker halt, but the chart just collapsed from under me and I ended up getting stopped out for a -$4,000 loss.

But that wasn’t the end of the PRPO story, as the chart started to curl back up minutes later to around $3.20. I hopped back in on the first new high and managed to hold until I was back in the green by about $80!

Even that wasn’t the end of my trades in PRPO, because, as it approached $4, I was confident momentum would carry it. I was so confident I added five-times my 3,000 share size for a 15,000 trade. Of course, since I ended the day down -$3,000, you can imagine what happens next.

That chain of events all started as a case of FOMO, and I might have been better off taking my $6 SONM trade and planning for Friday.

However, my primary takeaway from this misadventure is to remain cautiously optimistic when it comes to momentum plays right now. That means pursuing opportunities when they crop up but also managing my risk with smaller share size.

In any case, I’m looking forward to being on the right side the next momentum name that appears on my scanners.

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