Why I Bought NVDA Today When Everyone Else Was Selling

In a nutshell, I bought NVDA today because it was a low risk, high reward trade.

I bought NVDA today at $130.68 as one of two things are likely to happen very soon. It’s either going to move back up quickly above today’s high, or move down quickly below today’s low.

It could chop around for a few days before making up its’ mind, but now that it has completed a head and shoulders trading pattern by breaking below the neckline, I expect it to make a strong move one way or the other, and to do it quickly.

I’m managing the risk by taking a 1/5 full size position and setting my stop loss at 2.96%, which puts just .0015% of my total account at risk.

My intention is to build up to a full position size over the coming weeks, but I’m not going to get ahead of myself. Let’s see what the morning brings first, and see if I’m even still in this trade by the closing bell tomorrow.

I Added To The Position On Jan 3rd

It’s been seventeen days since I initiated my NVDA position. I had to be patient buying off the low, but so far it’s working out.

After bottoming for a couple trading sessions it had a high volume move off the bottom, followed through the next day, and then put in a fairly shallow pullback of 5.5%, forming a buyable pivot point at 141.90.

It gapped up a bit this morning, but was still below the pivot point, so I set a stop purchase order for a bit above the pivot to increase my position by 50% from 1/5 full size to about 1/3.

My average cost increased to 134.26 so I moved my stop up for 1.87% risk from the initial 2.96%. This kept the amount of dollars at risk about the same and gives the position what is hopefully enough room to account for any volatility.

I Failed To Take Profits On NVDA And It Hurt My Equity Curve

The day after my last add NVDA gapped up and ran 5% from its’ previous close. I had my finger on the sell button for a 12% gain but I didn’t sell any of it.

It was a very conscious decision not to sell, but it was also a greedy one. My reasoning for holding was that I felt very well positioned and that it was unlikely I would get stopped out.

Four days later I was stopped out.

In the end I took about a 4% loss as it gapped below my stop at the open on Monday Jan 13th. I should have sold at least a partial on the 6th, and the rest on that awful candle on the 7th. But I didn’t, I allowed greed to get the best of me.

Chalking this one up as a lesson.

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