Half Successful Trade - IDMI

This is my today's half successful trade today.

Successful:
I bought at the right beginning at market open. My entry price is $3.62. This is a biotech company and dramatically do down for several days. I found that for biotech stock, if it is in the base area, and the price is gap open high, it is very likely that it is a good up trend day. (I have not seen a counter case for 1 to 2 weeks since I notice this.) And the price is go up in the first 2 minutes, so I get in.

Failure:
1) I should buy more in the middle of the up trend. (Anyway, this is my first try on this kind of setup)
2) I exit too early at $4.1. I should wait until the EMA5 cross down to EMA 34. It is about $4.4

Failed Trade - ALTH

I failed trade ALTH today.

ALTH is failed to develop one of their two drugs. I have never seen a stock failed drug can go up like this.

My error:
1) When the price go up in the premarket, I think it is a good buy, since the company will go down heavily due to its failure drug development. But I am wrong. So WHEN STOCK GO UP, NEVER SHORT IT. This is the same error on ROLL trading.

2) As a day trading candidate, I can not short. This is what I confirmed today. Short such a low price stock require large amount of margin. It is not deserve to short stock as a trading candidate. NEVER SHORT ON DAY TRADING.

What is the makeup?
I did not recover at all, because I do not know when the stock will go down. After all, their drug is failure. But I also do not have money to short them more when the price go up since short low price stock require so much margin.

What I did is buy back part of the stock and at the same time, buy put option. At this time, I need to buy a little bit more put contract since option is not 1:1 to the stock. I guess 2:1 maybe a good choice (Also include some additional short power).

Finally, it goes down. Also I still lose some money, but just a few.

DO NOT DO ANYTHING ERROR AT THE BEGINNING. NEVER SHORT WHEN THE STOCK IS GOING UP.

Short is not good for day trading

Short is not a good candidate for day trading because the margin requirement is huge. For example, in IB, the stock below $5 require margin of $5/share.

So when is a good time for day trading buy? I am thinking of several following situation.

1) The company has breakthrough news, the price is go up and after market open, the price is still go up.

2) The company has bad news, the price go down dramatically, then the price start to go up, EMA 5 cross above EMA 34. This could happen either in pre-market or after market open

Fail Trade - ROLL

I lost money in ROLL today. So it is a good to write something.

I didn's short at the opening, as normally I will do, but I short at about 10:15 at the price $37.25. At time time, for 1 minute chart, EMA 5 is already cross up the EMA 34. But in 15 min chart, the price just touch the EMA 5

The entry point is not good, so don't do anything when EMA 5 cross up EMA 34 in 1 min chart because the story might be different now.

If I go into it, the first choice and the best choice is stop out at $39.

Never never buy reverse at this time, since we don't know where is the top and don't forget this stock gap down!!!

OK, second choice, short more when EMA 5 cross down EMA 34. And cover back when is good time. Today is at the market close. Have to close today because 1) I double the position, so it is dangerous. 2) This stock is volatile and not commonplace with others. So I do not know what is happening tomorrow morning. (Normally, gap down stock with down extension will get gap down next day, but here is not the case)

Last choice, do nothing, and cover back tomorrow morning.