There are in fact stocks that are “rogue stocks.” These free agents literally have the power to do whatever they want at any moment (within the law.) This makes these types of stocks very dangerous! So what are these crazy stocks that can crush you in a heart beat? How can you and I recognize them? One way is to look left on the daily. Always look left before getting into any stock! Another way to find these crazy stocks, is look for huge gaps on the daily and weekly. How did the stock perform every other time it gapped? If you are using candlesticks with trend, you can see solid green candles that essentially melt all day.  These situations rarely give their “victims” an exit. Another very important pattern to look for is a choppy chart. If it looks like a bar code, or like it’s squeezed in a very tight range for extended periods, it is likely it will do the same to you when the excitement wears off.

At this point you may be wondering, how bad can these “rogue stocks” really be? Is it possible to lose 80% or even 95% in a single trade. The simple answer is YES! I was once in a halt that opened up 80% below where I got in. Another time, I had one of my brokerage platforms glitch right when I was taken into pretty decent profit. Being a newer trader, I then felt angry and entitled. This made me hold, hoping for a bounce. It started with -$400, then qucikly -$900..ending quickly at -$1800. I believe I lost 95% in that trade. This brings us to another important topic that we will touch on in the future, feeling entitled. When we see green in the P&L column, it does something to us. It makes us greedy without realizing it.