Once Upon A Time

Once Upon A Time

I've read somewhere, cant remember the book, however the line was something along the lines of: 

"some of your best friends in life tend to start off as your worst enemies"


ONCE could not be more of that example, from the start of the year I fucking hated this name for being such a wide and dirty name.This was were we started to load up when it looked like it as about to smoke that $65 level, which later realized the real level was $66 (Sometimes it pays to pay up).

Whatever circumstances life brings you, you will be more likely to succeed and find happiness if you take responsibility for your decisions instead of complaining about things being beyond your control. Psychologists call this having an internal locus of control and studies have shown that people who have it tend to outperform those who do not.

ONCE tested this theory to the max for how many times it set up, only to pull the rug out from under me. After taking a set back I could see the full picture. There is a statistic regarding dating that most guys aim to close night 1 and some do (we all love to brag about that one night stand) however the guy who really pulls is the guy who looks at the long game and strikes on the 7th+ encounter. ONCE was no different it failed at that $66 area 7 times over 2 years! Luckily for my wallet, I only have to try it 3 times....

Now when it finally went, I encountered one of my weaknesses (buying after an extended up move) I was buying on the 7th green day after being cheap and trying to limit in at $60 on news and missing the buy. On that 6th day I had to either shit or get off the pot. 

When you encounter your weakness you can:
  1. Deny them (what most do)
  2. Accept them and improve (work on turning them into strengths)
  3. Accept them and work around them
  4. Change what you're going after

To be consistent number 2 was the winner, put that fucking buy stop in and if it goes, hold on and it went and it was off to the races, and still not the easiest name to hold after that sell off prior to the earnings gap up, however it was a name that respected levels. So after it started to flag from $74 to $80, first go at $80, second attempt at $80 holds than third times a charm (added $80) than started to flag again between $80 and $84, first attempt holds, second goes and quickly comes back, third time back up through that resistance area added up through $84.

Now this whole time its been buy, buy and buy. At some point this name has to start pulling back so now its time to start switching gears and off load the newly acquired stock and hold the core (the great stock $66 stock).

When you have a winner, you ride it, just lighten the load

So lets recap, bought $66, added $80, added $84

Now it pushes to $88 (first time) pulls back and retest $84 bounce back to $88 no dice (second attempt), back down, ok stop out for those $84 buys. Small profit no biggie, still have the $80 stock and the $66 stock.  Third time up to $88 and through however now its finding resistance much quicker only $2 higher at $90. Something is different now right?

$66 broke and went $8 quick

$80 broke and went $6 quick

$84 broke and went $6 quick

Now $88 breaks and goes $2 pretty slow?

Ok lets tighten up those $80 buys and get stopped out for $6+ on those buys.

So lets recap, we sold the worst stock first the $84 adds for a few bucks, than got rid of the $80 (better stock) for a decent chop and now still have the core buy from $66.

The whole way up, it was easier to add into strength instead of trying to bid into support. Looking in our rear view it's always easy to say:

"of course that worked, I woulda bought at the low and got out at the high"

When you take your eyes off the past and have to look forward into the future its tends to be easier said than done.

In the moment when a stock is pulling into support it tends to look like its about to die, so on the way up, I'll add on the way up than when things change, its time to change the game plan.

This is where ONCE upon a time comes into play. We can see that $80 was resistance than after it broke it keep shaking out $80 however it would hold this $79 area (left circle). This is where I felt "if" ONCE was going to hold this would be the place to give it a shot. It had a gap up on news to new all time highs and crapped the bed, inside day and down for 3 days in a row holding that $80 area perfectly. Just screaming shake that $80 to cause the most pain before the turn.

Next day off the open ONCE flushes $80, my $79.10 bid gets hit and before I can blink its back up to $82 (great sign). Now I did want to add back up through $82 but I made an excuse and didn't add (something to work on).

So can you trade and hold a name at the same time? After reading this recap, hopefully you can get a little more insight on the topic. I will still hold that $66 core, and will trade this $79 buy just like the $80 add and the $84 add as a trade. For now I will be a seller in that $90 area and if it sets up as most charts we trade, eventually I will be looking to buy $90 instead of sell it just like how we were selling AMZN at $1,000 and now were looking to buy.

 "poor people hope, rich people plan"



Leave a comment