Hey all so today was a super awesome day. Although I ended down $400 I actually wanted to share with you my experience on what happened and what I was looking for.
So to start, I was looking for a stock to trade that had upside potential. The overall market has been pulling back with a run up higher trapping all shorts. When the market goes up, I like to be long stocks. Especially penny stocks with massive upside potential. Then came $MOSY. So the morning breakout was awesome had I had it on my watchlist. Being that I just recently got back into pennystocks I missed this Initial move. $MOSY is a short float that got rotated. What does this mean?
The number of shares that are outstanding on this penny stock are 6.48 Million. This means the total number of shares that the public can trade is that. But wait? We traded 21 Million shares today. What’s going on! Well, simply put, the shares that are available to trade are rotating hands. Low float stocks that trade volume over the float has massive room to spike to the upside. The key is the short sellers have to get trapped. What I saw was a late day pullback with the stock holding and going higher. My idea was that all the late new shorts that got in at the top, had they got squeezed out of their position, would send this stock higher. I knew this had run up a ton on the day. That was my “watch out” indicator that would tell me to sell in the case we got a massive drop. It started to spike, we hit a wall at $2.60 and it couldn’t break higher. The shorts were in control. As it ramped back up we couldn’t get higher. My mindset was, if we crack below the previous low, this could go much lower so I’ll take my chances with my mental stop at $2.25. I was risking $0.25 for a possible run to +$3.40s. Great risk reward.
Bottom line, the shorts were in control. It tanked and I got out at -$400 on my 1500 shares. No harm done. I did get in around 2pm which was a little early. I should have waited longer. I’ll be looking more into waiting to see around 3pm+ to trade. All in all the lesson was learned and I’ll be more disciplined tomorrow.
Happy trading and let’s get you confident taking trades on your own.