This is my biggest loss to date. I’m down $60.99 on this one. I really thought $EFOI was going to breakout this morning. They’re a military contract winner in a niche and may see more business come their way in the near future. This recent contract was worth 7.7 million dollars. In the grand scheme of things, I should have used common sense before jumping head first into this trade.
Bought 50 shares @ $8.34 = $417.00
Sold 50 shares @ $7.52 = $376.00
Loss = $41.00
E*Trade fees for this transition = $19.99
In the end I lost $60.99
7.7 million dollars is a lot of money, but apparently not enough to generate the type of attention that investors and day traders are looking for. Maybe a 25, 50 or 100 million dollar contract would have brought more hype, buzz and investors to the table, I don’t know. Remember I’m still new at this. My $500 account is now down to $400.
Again I took a “hot stock tip” from someone and acted on it before fully processing the possible outcome. I was looking for a home run when others were just looking for a base hit. I have a small account and fell like I need to go balls out on every trade until something good happens. I’m not upset. I’ve come to terms with the fact I’m just practicing.
Today I learned a few more lessons.
A 7.7 million dollar contract may help the stock as soon as the news is announced. But good news yesterday, does not always equal good earnings today. The other lesson has to do with these “hot stock tips”. When someone you “trust” says they are buying something to possibly make a .50 cent profit per share, don’t assume the stock will go up over $1.00 per share. Finally, if you assume the stock is going to shoot up at the opening bell and it doesn’t, seriously consider your exit strategy.
I think its OK to take stock picks from someone that has an overall winning record. No one can predict if a stock will go up or down, we can only speculate. For the most part, today seems to be a shitty day for everyone in the chat room. I’m not sure why, but it feels good seeing the person that I took this “hot stock tip” from losing on almost every trade today. Makes me realize that even the best mess up from time to time.
The show must go on.
I’m gonna lick my wounds and try again next week. Maybe I’ll re-watch some trading DVD’s since I can’t trade anymore this week. I’m somewhat glad to have this SEC rule in place because I want to redeem myself. The odds are, I’d probably do something stupid again and lose even more money.