The position is taken, but with a very close call

Alright, I did some good patient trading today and it ended up banking out. The chart you see below is of AXYX in 5 minute increments throughout the day. As you can see the stock hovered in the $1.14 - $1.16 range most of the day. I put limit orders in (read the original post below) and decided to be patient. If my shares hit they hit, if not, well then I react accordingly. I got in 5,000 shares at $1.15, then put another 2,000 in at $1.14 just to see if I could steal some more. Surprisingly, I got all of my shares in and in the end accumulated a 7,000 share position (see the 2nd picture for the two seperate orders broken down).

Why is this so beneficial that I played it slow and got in where I did? Well, let's look at the other way I could have played it. For the first 5,000 shares it was either buy them or try and get them off of someone selling. So, for me to buy them at the time would have gotten me in at $1.16 which first off is $50 more than where I got them at. I then would have boughten my 2,000 more later on at $1.15 (because the ask went down to this point) instead of waiting to get in at $1.14 which is another $20. Because I was patient and did not jump the gun, not only did I make an extra $70, but my cost per share is now lower, and I am already up $90 on my position instead of just $20 ($50 + $20 + $20 vs just $20) with the stock priced at the close of $1.16.

So the close call now came later on and this is the theme of the day. We all know that "insurance" (aka stop losses) can be great, but what if they are activitated when you don't want them to be? Remember the first stock I traded? Well, this is a same case scenario, almost. THIS IS VERY IMPORTANT, sometimes a stock will take an intra-day drive (can you see the quick fall in the picture below?) and if you place your stop order to close to the actual price you can loss alot of money. I will explain in more detail. After I got my 7,000 shares I put a market stop loss at $1.10 which means that if at any time the price hits $1.10 my shares will automatically get put on the market and sold as fast as possible. Well looking at the intra-day you can see that the price dipped down to $1.11, just a penny away from my market stop loss and within a few minutes was all the way back up to $1.15. The close call is this, if that price would have hit $1.10 then my 7,000 shares would have been sold immediately, putting me at a loss of over $350 (7,000 times $.05 + my order costs). This is why putting stop losses can actually be your worst enemy if placed incorrectly and must be thought out as well. I used $1.10 because it is the 52-week low price and a big support level, thinking back now I should have placed it at $1.09 which would get me out if that support level was broken. But, in the end, I lucked out and still have a great position. I have since cancelled my order and have decided to take the all-day shift of watching the stock tomorrow and the days following to sell out if need-be; I will judge on the fly.

Now that step 1 and 2 are complete (finding the play, then taking an actual position), I can breath a bit and wait to see what happens. Will the CFO speaking at the convention Wednesday really cause a price-spike? We do not know as of now but once the next few days unfold we will have our answer. Make sure to double-read and take the finer points of today's lesson, because every action you take for granted as non-important can actually cost you your wallet. Have a great night,


AXYX Intra-day chart in 5 minute increments. Notice the quick dip down to $1.11 back up to $1.15.