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Stop-Loss & Big Names: Telsa, Walmart, Netflix

E*Trade Brokerage: 3/12 Telsa, Walmart, Netflix

As the week began, I saw that Netflix (NFLX) had been gaining very quickly since I purchased it about a month ago.  From $260 to $330!  I was looking at the charts and the growth looked ridiculous; too much too fast.  I didn’t think it was sustainable.  Not long after that, analysis started calling for a price correction.  I set a Stop Loss* Order for $325 which executed a few minutes later.  I cashed out a profit!

Sold 5 shares of NFLX for $324.73 each, total cash was $1,616.66.  A profit of $309.71, about 24%.

Looking to reinvest, I remembered that Tesla (TSLA) was trading around $325 the last time I checked.  Good news, more good news and bad news on that front.  The good news was, the price was already climbing fast.  The more good news was, I already held 4 shares that were making profits as the price rose.  The bad news was, it was too late to buy more shares because the price was near its peak level of $350.  With little room left to move up, I decided this was not the best trade right now.

Keeping up with Amazon

Walmart (WMT) had been trending down lately, so I took a small position in my Robinhood account hoping for a quick turnaround.  This has failed to materialize and the stock has continued to fall.  The price has seemed to reach a floor level around $88.00.  Walmart has been pushing its online sales hard to try to keep up with Amazon (AMZN).  While they have struggled to keep up they have been making some gains.  WMT recently launched a new line of clothes for men, women and children; this is an attempt to compete directly with Target (TGT).  This line was just launched and we have no numbers to tell us how well it’s been doing yet.  This looks like the perfect time to take a gamble since I have 2 ways to win!

I bought 24 shares of WMT for $88.63.  The total cost was $1,059.07.

E*Trade Brokerage: 3/15 United Airlines

At the end of the day on 3/14, there came a breaking story about United Airlines (UAL).  A dog had died in an overhead storage bin on one of their flights.  This sad story brought additional scrutiny upon the airline as they have struggled to recover their image.  A few hours later another story broke, they flew a dog to Japan that was supposed to go to Kansas.  Neither of these stories were helping United’s image as an airline working hard to make no mistakes.  I had purchased stock in UAL a few months ago when I believed they were recovering their image, read about that here.

The Dogs

As the media dug into reports of animal deaths on airplanes, it was revealed that there were 24 reported last year.  18 of which occurred on United.  This did not bode well for me and my family as we are a dog family having 2 pups ourselves.  My wife asked me about an upcoming trip we had planned and who we were flying with.  The trip is still on schedule since we are flying American Airlines (AAL).  We decided to sell the stock simply because we don’t want to be involved with a company that has such a hard time keeping animals safe while flying.  Being that UAL was involved in 75% of the animal deaths that occurred on airplanes last year, this indicated a potentially major problem, not just an isolated incident.

I sold all 15 shares of UAL for $71.07 each, total sale was $1,059.07.  A profit of $11.72, about 1.1%.

E*Trade Brokerage: 3/16

Micro Technology Inc (MU) is a semiconductor manufacturer that has been steadily rising for the past year.  I heard about this stock from a friend who is a full-time day trader.  He told me he was expecting it to make some gains after the earnings were released on 3/22 and any price under $60 was a good place to buy in.  I decided to take the extra cash I had from the sale of UAL and invest in this stock.

I bought 19 shares of MU for $60.00 each, total cost $1.146.95

Robinhood: 3/13

ROKU had not been doing well.  The next news coming was a flood of additional shares into the market.  I believed that this could send the price downward even further.  It was time to cut my losses.

I sold 10 shares of ROKU for $37.75.  Total sale was $377.51, loss of $53.39, about 12%.

HTBX, one of the volatile stocks I have been watching, was down but seemed to be trending upward.  I decided to try and execute a day trade for some quick profits.
I bought 186 shares for $2.05 each, total cost $381.11.
This sold with a stop-loss* order for $2.02 about an hour later. Total sale was $375.79, a loss of $5.32, about 1.4%.

Although this trade lost money, I did keep my losses to a minimum and exited the position before any major damage.  I think I am slowly learning the techniques.  You need to protect your bankroll from losses by taking a small loss the same day rather than holding a position for week or months trying to get back to even.  Setting stop loss* orders protects your funds from getting tied up for a long time and taking large losses.  More on Stop-loss orders at the bottom of this post.

Robinhood: 3/14, Happy Pi Day!

I was eyeing some volatile stocks again on my lunch break.  I saw that Dick’s Sporting Goods (DKS) was appearing to start an upward charge.  It made the following transactions:

I bought 10 shares fo DKS for $33.75 each.  Total cost was $337.50.
Limit sale of all 10 shares for $34.00 each.  Total sale was $340.00, a profit of $2.50, about 0.7%.

I had one of the side hustles send me a check which contained a handsome profit.  I contributed $450 to my Robinhood account.  This is the maximum I intent to contribute to this account for the time being.  To date, I have lost $150 of the $2,000 I have contributed.  You can see all the details in my current holdings and transaction list.  I want to make some solid gains with this amount before I add more.

Telsa (TSLA) made more headlines as there were more reports of production delays on the model 3.  Earlier in the week, the price had risen to almost $350, this news caused the price to slide back near $325, my buy level!

I bought 2 shares of TSLA for $326.49 each, total cost was $652.98.
Limit sale for $340 was set.  At this writing, the sale has not executed.

Robinhood: 3/16

Trade-ideas.com hosts a free Day Trading chat room with lots of good info on day and swing trades.  They offer paid services but the chatroom is free, just create an account and log in.  I like to listen in while I’m at work if the office is empty. CHD was stock mentioned there first thing in the morning.

I bought 3 shares of CHD for $49.96 each, total cost $149.88.
Stop order for $49.85 was placed at the end of the day.  Total from sales was $149.55, a loss of $0.33.

Limit order for BBG sold at $4.85 per share, total sale was $378.30 a profit of $3.90, about 1%
I had held this stock since 3/6 and when the opportunity to take a small profit presented itself I took it.  The original limit sale was set at $5, I changed it the day prior when I saw the price was starting to recover.

So despite taking some losses and some smaller profits than originally hoping for, I feel good about the past week of trading.  I am beginning to set some rules to guide these short-term trades, which will enable me to be more profitable in the very near future.  In the short-term, stocks are essentially unpredictable.  When you expect them to move one way they might end up doing the opposite.

Cash Management

While you might be right about a stock and it will recover eventually, you are tying up available capital when you hold a stock for a long time.  As you well know, you must have money to invest.  Having that money sit in one position waiting to get back to even is not good money management for short term trading.  If you are holding a position for the long-term, a momentary paper loss for a few weeks or even months is not a bad thing.  If you are looking for short terms gains, you should keep your money in accessible positions.  My initial rule is to limit any loss to 1%, whici is what I have begun setting stop-loss orders at, 1% below my buy-in price.

*A New Tool: Stop-Loss

*Stop-Loss Order: This is an order that causes a sale to happen automatically, much like a limit sale.  A Limit Sale sells a stock when it reaches or exceeds a price you predetermine, read more here.   A stop-loss order helps you STOP the LOSSES.  It is a floor price that you set; once the price is reached, the sale happens automatically.  I use these orders when I am trading to limit the loss I take on an order.

Typically, I set it 1% below my buy-in price.  I also use it to protect my profits.  When a stock keeps going up and up, I don’t want to leave profits on the table, so I set a Stop-Loss order well above my buy-in price, but below the current price.  If the stock suddenly reverses direction, I lose a minimal amount of money.  One thing to keep in mind is that the stop-loss order turns the order into a market order when the price is reached.  So the price you set might not be the exact value the stock sells for because the trades take a few seconds to execute.  Typically this is the difference of a few pennies but with extremely volatile stocks it can be more significant.

  Contributions:

As mentioned above, I contributed $450 to my Robinhood account.
On 3/16 I contributed $50 to my E*Trade brokerage account and $105 to my IRA.

 

In coming weeks I will make a trip to Wall Street, invest in more cryptocurrency and watch the Spotify IPO!!

Thanks for reading & happy trading!

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