No go on GoPro (GPRO). Here’s the analysis following yesterday’s analysis. (September 09, 2015)
GoPro ( NASDAQ:GPRO ). I mentioned this yesterday; here’s the reason why I’m coming back to this; this isn’t a trade, this is really a lesson. Yesterday in the “Free Chart,” I featured this; this is what the stock looked like yesterday. And my suggestion was that you consider buying this stock, and listen carefully, because back here the stock had held at support here. The stock held it’s support yet again, and I’m not so dogmatic to say, “Well then, GoPro will hold here at support too. I think it’s got what it takes to move up again.” That’s not the way I trade.
What I was saying was that this is a test of support, and it is a low risk trade. I’m pretty sure I said something like, not necessarily a high probability, that’s not the point. The point is it is a low risk trade because it’s at support. So what you do, and this is the operative term, and it’s not just for this stock, this is for any trades that you’re making if you’re buying pullbacks. You wait for the rebound. You wait for the rebound because the market is showing you that somebody’s in there buying stock that wasn’t a day or two or three ago. And that’s saying, okay once again this is a floor, what if I’m wrong?
Well what if I’m wrong, it’s okay because you’ve got a stop just a little bit below where this support was. But again, you only put in the stop when you make the trade. And you make the trade when you see the stock bouncing. So we don’t see that stock bouncing here, right? So we’re waiting and then this comes. So this is a trade, seriously, it should be actually like most of your trades, it shouldn’t actually be a trade it should be a potential trade. And what I mean by that is, you’re looking at a lot of stocks and you’re waiting for the right trade. You’re saying, “Okay, if this does this then that. If it doesn’t then I won’t.” And most of the time you’re going to see possibilities, but you’re not going to see trades, you’re just going to see possibilities.
So what I’m telling you here with GoPro ( NASDAQ:GPRO ), this was a possibility, never came to fruition. Somebody mentioned in the forum today, something like, “I took this trade,” and everybody takes responsibility for their own trades, I’m not making that declaration, everybody knows that’s how I feel, everybody does take that responsibility. My suggestion to this person and to anybody else was this was the analysis; it’s not really moving anywhere so you really need to rethink this trade. So do this on all of your trades, not just on this one. Wait until you have a clearly defined, “Oops I’m wrong level.”
If you can’t find a level where you can look at it, and this is two-part thing. If you can’t find a level where you can look at it and say,” Okay, if the stock goes to there I’m wrong.” And then take that level and then look at the position size that you have and say, “Okay, if I’m wrong and I get stopped out, the loss that I take will be an acceptable loss.” If you can’t go through that two-part analysis then you should not make that trade.
And I will tell you; I have made that mistake, on the second part, many times, more times than I want you to. It always happens this way, you’ve got a real strong conviction on a trade; you think this is the one, so you go in bigger. You go in bigger than you typically would. And sure enough that’s the loser, it starts moving against you; pretty soon you’re looking and you’re saying, “Okay, well it hasn’t gotten to my, “Oh crap, I’m wrong level. I really didn’t think I was going to be wrong on this trade. But I’m so big and I’m getting smaller all the time, and I’m losing all this money. So that’s not working for me. What the “H” do I do?” I’ve been in that situation; it is a lonely place to be.
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