Naked trading

By naked I mean without stops. I just can't wrap my head around stops, so I'm trading naked, but I want to control my risk. To do that I'm only taking very small positions. Then I'm just hanging on.

In January, February, and March of 2016, this would have appeared in the Year -50% scan results ... maybe even in May. Actually, through most of 2015, too. And in the fall of 2015 the chart would have looked distinctly wedge like, even on the short term chart in the scan results. The weekly chart, if you had clicked through, would have shown an even bigger wedge, and on the monthly chart you might have noticed several spiky tops.

It's very possible I would have bought say 15 shares at that point. And of course in the coming months I would have watched the price drop by 1/2, very nearly to $1. I wouldn't have thought that was a bad thing at all, and presumably I would have bought another 30 shares then.

Once it took off I could have guessed that it might go above $10, because of the earlier tops at that level. I don't know how I would have known it was going to $17, but once it made a top there I would have thought, for one thing, that it might be a good time to sell, and, for another, that it might well go back at least part way to the top. I could have applied a standard rule and guessed it would go back half way to the top, and placed my order to sell at $13.

All in all, then, as far as we can see, this trade would have maybe generated five times my money on the first investment in a little under a year and ten times my money on the second in half a year, for a total gain of $450 on a $75 investment including commissions, approximately a combined 6x return or so, and given that I'm trading naked my risk would have been that $75, so if all my trades produced similar results I could break even by winning once and losing six times. Whether this makes it a safe game or not I can't say, although the total at risk in seven similar campaigns would be less than $1000.