Hey trader’s, Ross Cameron here! Today’s trading activities offered a vivid snapshot of market volatility and how swiftly conditions can change in day trading. It was an intriguing day to say the least, with several notable events that shaped my trading decisions and outcomes. Let’s dive in and discuss the details of my trading day!
Market Recap
Reflecting on today’s trading, my overall assessment was positive, although the market presented a unique set of challenges. At one point, an unusual scenario unfolded with four stocks I was monitoring simultaneously halted. This rarity was my first sign of the underlying market volatility.
The simultaneous halting indicated not just a volatile market but also highlighted an issue I find crucial in trading: attention dispersion. With multiple stocks drawing attention, volume splits, reducing the impact on any single stock. Typically, a focused volume tends to aggregate in one stock, causing significant price movements, which is the ideal scenario for substantial gains.
The advantage of volume concentration is most evident when one stock captures the majority of the market’s attention. This leads to higher relative volume and the potential for explosive market moves, which can be highly profitable.
Analysis of Key Stocks
MLEC was the leading gapper in today’s market, showing a promising start with a 75% gain, navigating through a 37 million share float, and registering about 57 million shares in volume. Despite these impressive stats, the supply nearly matched the demand, causing less dramatic price shifts than one might expect from such engagement.
Contrastingly, EDBL demonstrated a stark imbalance between supply and demand. With a minuscule float of 300,000 shares against a volume of 1.8 million shares, the conditions were ripe for significant price volatility, evident from its 50% increase in stock price.
Today’s trading underscored the critical role of the supply-to-demand ratio in understanding potential price movements. For instance, EDBL and MLEC serve as perfect examples of how varying float sizes and trading volumes can yield different market behaviors.
The comparison between MLEC and EDBL illustrates how similar volumes can result in vastly different outcomes based on the supply available. EDBL, with its low supply and high demand, saw a more pronounced price increase, highlighting the exponential impact of this imbalance.
Although EDBL showed substantial gains, the lack of a strong catalyst and existing resistance levels suggested potential pullbacks, which indeed materialized later in the day.
TRSG, a recent IPO, also caught my attention. Despite several halts and erratic resumption prices, which could deter less experienced traders, it provided an interesting study in IPO behavior but did not make it to my trading list today due to the unclear chart patterns and high risk.
NIVF offered a learning opportunity with its announcement of a non-binding term sheet for a reverse merger. Despite initial disinterest due to its lower stock price, I engaged but had to exit quickly, minimizing losses due to rapid market turns.
SMFL presented a different scenario with its recent 7-to-1 reverse split acting as a catalyst. My entry and exit on this stock were well-timed, securing a profit of nearly $5,000. This trade was particularly satisfying, even though it encountered a disappointing pullback.
Final Thoughts
The multitude of halts today, like those seen in EDBL, TRSG, and NIVF, exemplified the challenge of dispersed attention in the trading world. It becomes difficult to predict which stock will emerge as the focus, leading to hesitation and potentially missed opportunities.
Ending the day with a profit of $3,623, I feel a sense of accomplishment and caution. It serves as a reminder of the importance of discipline in this high-stakes environment. I’m reminded to manage risks thoughtfully and maintain a disciplined approach to avoid common pitfalls like overtrading.
Trading can be as unpredictable as the ocean’s waves, but days like today provide valuable lessons in navigation. To those new to day trading, remember to practice extensively in a simulator before engaging with real funds. As always, managing risk is not just a strategy, but a necessity.
Remember to keep learning, stay disciplined, and manage risks cleverly. Happy trading, and here’s to hoping for another productive day tomorrow!
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Warrior Trading was founded by Ross Cameron in 2012, and is now a thriving community of thousands of traders. You can learn more about joining the Warrior Trading community here.
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