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“The fear of loss is human, to embrace loss is what will summon victory despite all odds.”
This week was interesting.
$2772.78 realized profit on a single trade that took 3 days.
And another trade I’m still in, currently sitting at $1758.24 unrealised gains.
My max initial loss on both trades was about $500 dollars.
Let me break them down for you.
The first trade is Nuvation Bio Inc. (NYSE: NUVB)
This is a textbook play.
It’s been on an upwards trend for 3 months.
Before a consolidation period (the stock is going sideways) for 3 weeks.
Building a tight range.
So it was an easy play - with a low risk to high reward ratio.
I entered on Tuesday.
Couple days later - the stock EXPLODED on market open.
I wasn’t there to witness it, had some errands to run.
So I couldn’t scale it while it was happening - but oh well.
Moved my stop loss up at the end of the day. Securing some profits.
The next day I decided to increase my position in case it would hit $7.40.
And I put in a buy stop order with a stop loss attached to it - with half my initial risk.
It got filled on market open, but afternoon was dead.
And the next day I got stopped out.
Booking me a profit of $2772.78
I’ll keep an eye out on how this stock moves over the next couple of weeks and see if there’s potential for another play.
The second trade is Arcutis Biotherapeutics Inc (NASDAQ: ARQT)
Interestingly my biggest winners this month are all pharmaceutical companies.
My best guess is that the incredible advance of artificial intelligence is helping with medical breakthroughs…
But whatever the reason is, doesn’t concern me too much.
Similar to NUVB, ARQT has been on an uptrend, booking new all time highs.
I wasn’t sure what point I could enter though.
Since the relative volatility is higher than average.
So what helps for me is writing the closing prices down so I just see numbers.
Sometimes candles, charts and patterns can be confusing…
It’s too much unnecessary information.
And they are all lagging indicators.
To me prices seemed to hover in and out of $2 segments.
So I figured the moment it crossed $25 would be a good enough entry point.
I entered on Monday, the moment it crossed $25.
And somewhere during the middle of the week, there was enough room for me to move my stop loss to my entry price - dropping my risk to ZERO.
As of writing this I’m still in it - with about $1758.24 in unrealized gains.
And since the stock has shown no danger signs or abnormal movements - there’s no reason for me to close it.
Besides following my system to a T.
There’s another important lesson here.
In the business of speculation - the guts to pull the trigger is just as important.
Once you have your system and your edge, you must act on it.
Act on it - however you feel.
“Scared money makes no money.“
I’ve seen it time and time again…
People sitting on the sidelines, being passive and bleeding out by a thousand cuts.
Yesterday night was an example.
I went to play Poker in this random shack, located in the middle of nowhere.
And walked away with a profit of 787.86 USD.
An average night, considering the low stakes.
But the ONLY reason I crushed is not because I’m a great player…
In fact it’s the opposite.
It’s because the players I beat didn’t have the confidence to pull the trigger.
EVEN when they had a better hand.
It always starts with one small mistake…
One wrong decision…
And before you know it, your whole stack is gone.
If we’re not careful, that could be us.
If we don’t make the right decision when the time comes…
If we cannot pull the trigger when we have to…
If we can’t accept risk, we can never expect reward.
Nothing will change.
Life will move forward, while we get left behind.
But if we can accept the outcome, good or bad.
Lady Luck will smile upon us.
Talk Soon,
Zhihao Huang
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