CNET: Profiting from the Highs By Selling In the Pre-market Session

The Entry Points

Stevie Swai

You’ve seen those signs while traveling by car, “last chance for gas for next 60 miles” or “next rest stop 45 miles”. I love those warning signs simply because I have a tendency to milk that last bit of gas in the tank, assuming that a station will be close by off the next exit. But what if the next exit is 60 miles away? I don’t know about you, but personally, I’m stopping for the gas as there’s just no sense in taking chances, right?

Thinking about opportunities in markets pretty much works the same way. After all, life equals markets. At least that’s how Trader Scott and I feel. And when you see an opportunity, it’s a pretty good idea to jump on it because it may just be the last chance for a good long while. I was presented with this very thing Thursday morning so I pulled over and stopped for gas.

Remember CNET? It rallied on January 4 when it gapped up from 1.23 and rocketed to a whopping 11.90. Trader Scott mentioned in the pre-market comments in the morning that very day BTW. Hopefully, some of you listened and bought it and sold it.  Regretfully, I did not trade it as I had my attention on other symbols, but since then I have been looking to make up for that lost opportunity. I found it yesterday as I got into the stock at 3.83; it had taken quite a little tumble on share offering news which is typical.

A press release was issued that the offering had been closed and the company had raised 11 million dollars so the stock started moving pre-market. I watched it hit a high of around 4.60 and I put in a limit order to sell half of my shares. It didn’t get a fill so I lowered the limit to 4.50 and got a fill.

The market opened and the stock price briefly hit a high if 4.80 before falling and continuing to fall to a low of 3.88. It’s too bad that I didn’t sell the whole position, but that’s precisely the point. We have no idea where these things are going so when there’s an opportunity to take some profits, it’s a good idea to do so. It could have opened and immediately fell. The only thing we really know about markets is that we don’t know anything. Better to have a half full tank of gas than no gas at all.

Happy trading!

6 Comments

    • Good morning Visao – I hope you can understand this answer. First of all, please pull up a 3 year daily chart and take a look at January 16, 2015 where it gapped up from 3.65 to 2.92. That gap needed to be filled so when the price cam down to around 3.60 on Wednesday, January 17, that was the set up. It was time to buy. Now I didn’t buy the low. I waited for it to test and break that resistance area of around 3.80. The point of the article is more from a psychological perspective. Traders must learn to take profits, for whatever reason. I tend to try to not overthink my trades. My intention is to make money every day. Everyone has a different goal. You must find out what yours is. Unfortunately, many traders sit around overanalyzing their charts looking for that BIG WIN. I, too, like big wins, but sometimes getting the small wins within the bigger moves yields a lot more profits and I made that point yesterday because I sold half the position and then bought it back on sale so to say. I tend to write less technical articles than Scott simply because I trade very differently than him. Psychology is a huge part of trading and your psychology will be reflected in your trading. That is why trading cannot really be TAUGHT, but it can be LEARNED. I’ve learned a lot from Scott about trading and in fact, that’s why we do this website, but it is as equally necessary to learn about yourself and ask yourself questions like: How easy do I let things go? Letting go is huge because that’s where you will start seeing your account grow daily. Anyway, I hope this helps. In the future, just be aware that my articles are more personal and of a more inspirational nature so don’t feel bad about overlooking them in the future if you don’t find them helpful.

  1. Love your posts. I’m learning so much I’m starting to turn my losses around since I’ve been APPLYING your techniques. It’s one thing to know, it’s another to know and act