My TSLA Story
Oct 24th 2019 TSLA gap up on earnings, I did not enter since the base was too deep and it was not a proper structure. Nov 22nd was Pickup truck release and Elon breaks pickup truck glass in front of tons of people and stock gap downs 6%. But after that event it keeps holding, volume dries up, showing tight action on the chart. 25% of the TESLA float was short plus after bad news it was holding well so on 12/2 I bought first position at 330 stop at 310. Added more on 12/6. Now I have QCOM 1999 as a precedent, TSLA does climax top on Feb 2nd, I did not sell, because it is too early for climax top. Then here comes covid crash, as I know myself if I miss my sell rule I will end up selling at the bottom, sold all 3/17 two days before the bottom. Lesson I learned is when you see the climax top at least sell half . Leaders always give second chances so on May 29th 2020 I again bought TSLA for around $830.Added a few along the way and it became my largest position, on Feb 26th 2021 sold most of my shares as it broke the 10 week line and kept a small position.
Reason I kept small position, I thought TSLA is next AAPL. I want to hold it for next 10 years. But again I end up selling on Sep 26th 2022, and it might be bottom, I don't care, don't want to think about it.
One thing is clear: if I grew up mastering William O'Neil strategy, I can not trade with Warren Buffet style. Holding through the bear market was very painful. I was not able to relax, my mind kept telling me TSLA triggered sell rule, it is below 200 dma. My integrity kept asking me questions, am I not following my rules?
Lesson I learned.
Master one thing! My core system is CANSLIM so I better focus on mastering the same game where I have a proven track record.
Trade set up, not the stock, my goal should be to find the next TSLA rather than getting attached to TSLA stock which already had a huge move.
Peace of mind is way more important. If I am stressed, it drains my energy and I lose focus. You need very sharp focus to master any game.“The time that leads to mastery is dependent on the intensity of our focus.” – Robert Greene
Market Wizard 'Michael Marcus.
There is a saying when you struggle and can't find the way out of your problem "go back to basics" so I started reading one of the classic books on wall street "Market Wizard" which I read in june 2004, at the start of my trading career. What is fascinating is that after 19th years in this game, this book is teaching me a new lesson about where I am at the other end of my trading journey.
A trader from Market wizard book , 'Michael Marcus' who started a company trading account with 30k in August 1974, after 10 years he turned that account into 80 million, he resembles my own personality, very competitive. Over the years the market has taught me that being competitive does not work in the stock market, what works is being flexible!
Following is exscript form his interview, "
The best trades are the ones in which you have all three things going for you: fundamentals, technicals, and market tone. First, the fundamentals should suggest that there is an imbalance of supply and demand, which could result in a major move. Second, the chart must show that the market is moving in the direction that the fundamentals suggest. Third, when news comes out, the market should act in a way that reflects the right psychological tone. For example, a bull market should shrug off bearish news and respond vigorously to bullish news. If you can restrict your activity to only those types of trades, you have to make money, in any market, under any circumstances"
In the next paragraph he says "However, the thing that saved me was that when a trade met all my criteria, I would enter five to six times the position size I was doing on the other trades."
In the recent bull market which started in March 2023, I was not able to get any traction, I believe that though we are in a bull market technically, there are hardly any set ups in the growth area where I find three factors which Michels talks about. Then why to force, the goal should be wait patiently.I know when things line up I can make triple digit.
Until 2019, I was extremely busy with kids, kept trading games with myself, things have changed now I have so much time on my hands. The constant barrage of information from Twitter, top CAN SLIM traders, my friends, meetups, and more has created a lot of noise in my life. I've realized that I'm getting too close to the market, and this isn't proving beneficial for me. It reminds me of the following quote, which resonates with my current situation.
"If trading is your life, it is a torturous kind of excitement. But if you are keeping your life in balance, then it is fun. All the successful traders I’ve seen that lasted in the business sooner or later got to that point. They have a balanced life; they have fun outside of trading. You can’t sustain it if you don’t have some other focus. Eventually, you wind up overtrading or getting excessively disturbed about temporary failures."
The exact same situation unfolded for me recently. I made my highest trades in my CAN SLIM account. My mental game is affected due to overtrading, I realize that I need to keep it simple and trust myself. No setups, no trades.
Let me end with best paragraph from the book, characteris to good trader "
Objectivity, a good trader can’t be rigid. If you can find somebody who is really open to seeing anything, then you have found the raw ingredient of a good trader".
Happy trading.