Was this a good trade?

[voko119 0]

I went short on BLNK at 8.48 and covered at 8.41.  My thought process was that the stock was siting at the high of the day and didn't seem to be breaking much above it so I thought it was due to come down. I traded 2500 shares and made 210.00.   My gut tells me that although I made money, it wasn't a good trade.

 

[Robert H 455]

Looks like you averaged into a losing trade. That's a recipe for disaster--especially on a low float. Here's my feedback on the trade:

 

1. 13m share float. Andrew recommends trading low floats only to the long side. They have the ability to go up hundreds of percent in a day, resulting in your loss potential being limitless when shorting.

 

2. I assume this is simulator. There were no shares for short (with IB at least).

 

3. What's your stop and risk-to-reward?

 

4. Your first entry is actually a Bull Flag. On the next candle--when it makes a new 5-minute high--many traders are looking to go long. That's why it popped up with such momentum.

 

5. 2500 shares on an $8 low float is $20k BP. That is a tremendous size. Say your stop loss was 0.50/share, that means a max loss of $1250 on the trade. If your in sim with an account of $25k, then you just risked 5% of your account. Andrew recommends 1% tops.

 

I know that may sound like harsh criticism, but it's not a trade I would personally take. Cheers.