Anatomy of a Trade

The best way to illustrate my method for completing the sale of a short-term position is through pictures. The following illustrate how I sold my BTG shares yesterday.

Here is what I do (followed by images to show what I look at):

  1. I review my cost basis by lot. I purchased two lots on February 28, 2020.
  2. Review the trading activity for the shares. What are the buyers bidding? What are the sellers asking for their shares? Is the volume heavy with high demand?
  3. Enter a preliminary order. In this case I chose $5.52 per share.
  4. Revised my order to $5.51, deciding an extra penny wasn’t worth the trouble.
  5. Preview the order.
  6. Submit the order.
  7. Collect the profit of 38.61% after owning the shares for three months.

Active Trader Pro (ATP) Images
I recommend Fidelity’s ATP as a wonderful way to enter trades and monitor my positions.

What is the cost basis? When did I purchase the shares?
What are the buyers willing to pay for my shares of BTG? That is the BID price.
At first I thought I would ask $5.52 per share. But then I reconsidered.
Notice that I sacrificed very little profit by coming down on my asking price.
I submitted my order asking $5.561 per share. The “S” means Sell.
I briefly watched the Bid/Ask prices. My order is somewhere near the top. There is heavy trading volume.
Notice the graph. The shares have been bouncing between $5.00 and about $5.70. I picked a price I thought would be tempting to buyers

I discourage novice investors from entering short-term trades. Learn how to buy good investments you plan to hold. Don’t become a day-trader!