I think my motto is becoming:
- Dive in if you dare
- Take the money and run when you can
This trade made 5.5% profit in 4 trading days. I had a hunch that it was time to cash out yesterday morning, and the trade also exceed my 1% profit per trading day rule. Lucky I did, as it dived over 6% the next day on the strength of the words of wisdom from one analyst, who seem think Songza is now flavor of the month. My quick check of Songza online made me want to stay with Pandora.
My trailing stop trigger point was $11.50, but at the last minute I bailed and reduced it to $11.25. Interesting, it just traded at $11.52 before the dive began on yesterday afternoon, so I would have just got to my trigger point if I had not lost my nerve.
Of course, you can see from the chart that if I had simply left my entry at $8.70 in play, I'd have potentially made much more in the last month. But the wild volatility would have made the last month nerve-racking indeed. Making clear trades within a single rally leaves you feeling a little bit in control of what you are doing. However after the Facebook debacle, it's debatable whether any social media stocks right now can be traded with any degree of control, or whether the market has any clue how what the valuation of these stocks should really be.
Here's the 1 hour chart so you can see just how volatile P is from day to day.
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