Ep 106: Breaking Down $NERV
All traders are bound to experience challenges at some point in their career.
For SteadyTrade co-host Stephen Johnson, it’s been hard to maintain motivation in recent months due to a mixture of trading ennui and fear brought on by unsuccessful trades in the past.
But it seems he’s turned a corner … He reports he’s currently up $1,300 on a $580 account and generally feeling more inspired about the market.
What happened, and what’s he doing right? In today’s episode, he and co-host Tim Bohen review it all, including a detailed analysis of his recent success trading NERV.
So what’s behind this turnaround? Stephen credits a few different things, including:
A great session with The Wall Street Coach. In case you missed it, Episode 104 featured a session between Stephen and Kim Ann Curtin, aka The Wall Street Coach. Together they uncover a lot of what’s been holding Stephen back.
In the episode, they also address a variety of possible solutions, including a potential trading sabbatical for Stephen. Learn why the prospect of quitting actually lit a fire under Stephen’s hindquarters and helped him find his will to succeed!
Less time. Stephen’s had a ton of responsibility lately at his day job, and it’s been eating into his trading time. But that’s actually a good thing — with less idle time, he’s not falling into the trap of ‘boredom trading.’
Boredom trading, or trading ‘just because,’ usually doesn’t end well. Tim and Stephen talk about this all-too-common trap, and how new traders can and should avoid it at all costs!
Listen in to learn why too much time isn’t necessarily a good thing for traders, and how to make the most of your trading even with a tight time budget!
When Stephen saw what was going on with Minerva Neurosciences (NERV), he saw an opportunity too good to pass up…
Minerva is a clinical-stage biotech company with several drug candidates in the pipeline. If you’re not familiar with biotech companies, they’re notoriously volatile in the stock market.
Why? Because these types of companies are all trying to create miracle drugs, but until they receive FDA approval, they don’t make a dime. Yet to continue developing the drug, they need to continually raise money … So they’re constantly spinning press releases.
If they do in fact get approved and create a successful drug, the potential for profit can be great with these stocks. But a lot of them ultimately fail — so it’s a huge risk.
According to Stephen, this was “a bread-and-butter short.” The stock was hitting highs and then coming down, and there was no relative volume. He sensed that it was a good time to make a move.
NERV: How It Played Out
In the episode, you’ll get a play-by-play of the market conditions on the day of the trade and how Stephen pulled it off.
Stephen and Tim break down the trade, starting by evaluating the chart pre-market and through a company conference call, then taking a look at what happened when the market opened.
On the day of the trade, the two biggest gainers were a female viagra play and an obesity gadget play, both of which spiked then got destroyed. Lame … but these conditions may have helped create an opportunity with NERV.
Stephen explains his entry and exit points — and how he made back some money that he lost on a short by going long. Yes indeed: he was a double agent on this trade! Don’t miss the discussion about this dangerous technique and why it worked this time.
Got a Question?
Are you dying to ask something about Stephen’s trade … or the market in general? Don’t be shy! We love to hear from our listeners.
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