From the Trading Desk

Past Big Winner 2012: FLT September 6, 2012

FLT was the greatest lesson of 2012 by far. FLT’s initial long signals were beyond perfect (10 out of 10) but they came immediately following the worst year of my trading career and that effected the way this trade was initially played out. Fortunately, for me, this was not the real setup and run for FLT. The real leg of this trade where the big money was made was the 9/6/12 signal. Unfortunately, due to continued paranoia over the QE tape this trade was overall handled very poorly. Truth of the matter is that we should still be long FLT at Big Wave Trading going into this ‘Past Big Winner’ lesson. The video below details the route that I took with my partial sells before selling out the stock completely. It was a botched trade from the beginning but still produced a great return.

Sadly, the gains should have been at least 2-3x as large as what was realized on the final sell. FLT was a well trending stock that got mixed up with my fear of an impending market reversal every time the NYSE/Nasdaq began selling off. Despite the strong market of 2013 where we rallied on above average volume, the reversals were sharp and I was constantly looking for a deep pullback every time the market reversed. Instead of holding FLT during these normal pullbacks–like I should have due to the large percent gains unrealized in the stock–I constantly protected my capital by selling a few shares here and there despite no true heavy volume sell signals.

It was not until January 2014 that real trouble showed up and even then the trade was mishandled. FLT should never have been fully sold until a heavy volume crack below the 200 day moving average. My full sell was a full sell out of fear that the market would continue to pullback hard and fast. I violated my rules and now FLT is trading at all-time highs where we should still be long some of the position from our 9/6/12 signal. What an incredible lesson learned. If I just would have focused on the price and volume of this stock, and ignored the market and my built in bias, we would be participating in this stocks current 325% gain since our 9/6/12 signal date. Once again, an incredible lesson learned.

From 9/6/12 to the final sell on 1/27/14, FLT produced a 128% return. From the buy signal to the top it produced a 175% return and if this position would have been handled correctly we would still be long part of the position for a current 192% gain as of 6/9/14.














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