If you read “$DAVINci By Golly Wow: Sell Now, Hold, or Buy More?” a few weeks ago, you must have read this part:
“I was able to enter a new position in DA VINCI CAPITAL HOLDINGS, INC (DAVIN) a day before the last trading day of 2015. What gave me the confidence to play this speculative stock? First, being on a holiday, I had free time and free cash. Second, the support at 1.59 to 1.60 was re-tested many times and it proved to be a resilient support line. So I thought, “Hmm, no one wants to sell below 1.60.” Other than that, I spotted cross-overs with my SMAs (won’t share my settings in this public post). So I pulled the trigger and the rest was history.
In the Stock Signals, I always tell my clients to only “trade at your free time with your free cash”. Aside from that, you plot your entry, target, and stop-loss price points, with your reward-to-risk ratio, before you enter a new position in any stock. Again, again, and again, you do all these BEFORE you enter a new position. It goes without saying that there’s no sense wondering about all these when the stock is already in your portfolio. Oh yes, this may sound elementary, but many buy a stock first before they figure out if they did the right thing or not.”
Let me show you the chart. Do you see how the SMA lines crossed over with each other?
If you’ll look at $DAVIN’s Weekly Chart, you’ll see how it showed strength in holding above 1.60.
Let me post some old notes here.
Alright. That’s it. I can’t capture a screenshot of every single conversation I had with my clients for they contain our moving-forward action plans.
As you can read in my notes below, we don’t mix regret with our trading strategy. We find interesting trade setups. We calculate our reward-to-risk ratio. We execute the plan based on our individual risk tolerance. If the stock is hitting a higher level or if it’s behaving differently, we recalculate our options. If our stop-loss gets hit, we sell. If our target selling price gets hit, we sell. We move forward. Our exaggerated expression of regret is by means of snapping our fingers and saying, “Oh well. Life is good!” Our life does not stop from that 10.10% that we had missed when $DAVIN continued to move above our target price from 2.87 to January 21st’s intraday day of 3.16. A gain of 79.38% is not bad. Immediately see your doctor if you still feel ridiculous at gaining 79.38% just because you missed the 10.10%.
What’s the lesson I’d like to impart with you? Managing emotions is part of managing risks. If you’re my client, it is my responsibility to provide profitable trade setups (if you have free time and free cash for trading) and find resilient stocks for long-term position investing (our Top Stock Picks for investors). The information and pieces of advice that I will give are within my area of control. But managing your emotion is outside my support boundary. I can control how I think, research, and analyze, but I cannot control your brain. You get what I am saying?
Now, have I signaled my clients to pick this symbol back up again? Subscribe today so you’ll find out (wink!). How? Register your name and email address below. If you’re not ready to become a premium subscriber, that’s fine. You may stay in my email list for as long as you want to receive the freebie stuff I give to non-clients. Cool?
Here’s the Price-Volume Distribution chart of $DAVIN. Do you know what it means when the larger volume (the green bars) are positioned on the lower prices? I interpret these kinds of things to my clients.
$DAVIN’s price moves downward. Foreign investors’ conviction deteriorates.
Enough of freebies in this post. Have a great extended weekend! There’s no trading on Monday (Happy Chinese New Year!).
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