Tuesday, February 5, 2013

The Nature of the Beast: Forced Buy Ins And Pumps Dumping.

Forced Buy Ins, its the Nature of the Beast. and Today that beast ran me down and clawed my eyes out. Sadly I force bought in on ECAU today during this 20% spike today for a grand total loss of 1420.00. O yeah the beast got a hold of me.

 Thankfully I didn't get bought in on SWVI during its spike as well because I was over margin and if it would have closed that high, Im not sure what would have happened, but lets just say i Could have been Belly up.  

But by the grace of God, and the Nature of the Beast.  SWVI started to dump today...FINALLY! I have been holding this short since last tuesday, and it has been a BRUTAL ride for many reasons.

The first reason SWVI has been such a brutal ride is I shorted it WAYYYYYY to early. I should have waited for the Stock to show signs of the dump like it did today. If i were to have waited to short it till today I could of had a better average than I do now even if I shorted it at the low of the day. 

P.S. This is also one of the major reasons I took such a huge loss on ECAU today. I shorted WAY to early. I should have waited for this bounce to start fading like it did today before i shorted it again. Instead I shorted it at the start of the bounce, Went way over margin, was force bought in, and took a major loss.

Lesson learned: Dont short pumps too early. You don't know how strong they are and they CAN keep going.

The second reason SWVI has been such a brutal short to hold, is I bit off WAY more than I could chew. Im Shorting with about 150% of my account value with margin. Sadly I didn't notice this till I was already in the position and it had ran against me nearly 10%.

Lesson Learned: Just cause your broker gives you buying power, doesn't mean you need to use it. 

Plan To Make It All Back(Fuck These Pumpers)

Thankfully SWVI is starting to dump and I still have all 15k shares.  Hopefully we will see this thing around .20 tomorrow and this long painful ride will have actually ended in some profits.

Check out the start of the dump.


Look at that nose dive. Looks like it will continue tomorrow


Also ECAU bounced up to 1.90 just as the market closed so I wouldn't be surprised to see it reach 2.00 tomorrow before it dumps again. Providing me with a great opportunity to re-short it :)


Started to bounce into the close.

Conclusion

Again today was a rough day. But at the end of the day, You trade to live, you don't live to trade.  And I am still able to trade as my main source of income so I can't complain when I have to learn these very expensive lessons. Also every trader must never forget about the Nature of the Beast. 


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