Well... you win some you lose some... this week I lost. Not a good week at all for me, took all losses from each trade I had entered. The one silver lining was I didn't change my strategy or do anything differently than I had the past several weeks. It was just one of those weeks where nothing went my way. Still played stocks with strong support levels, still had very good entries and didn't overpay or chase any of my trades. Just one of those weeks where all trades broke support and stopped me out. There is one key VERY bone headed thing I did this week regarding emotions when trading. I will discuss it further in my trade breakdowns below. Let's jump into the tickers and trades I made last week.
These were the tickers I traded for the week of March 18th 2019:
Below is a log of all 3 trades from this week:
As you can see from the log above, very bad week for me. First two trades were just unfortunate stop outs, last one was just emotions taking over and not trading smart which really put me behind the 8 ball after taking that massive of a loss. On that last trade last week, I basically didn't follow any of my rules, good lesson for those of you reading this about how not being strict and emotionless can lead to big or consistent losses.
Below is my current account balance after last weeks trades:
SFUN - This trade I was playing the $1.34 support level the stock had and expecting a bounce to $1.43+. Upon entering the trade at $1.34, I got a nice bounce to $1.39 same day and was feeling pretty confident that the following day this would hit for a nice 5-7% gains. Unfortunately the following day it slid back down to $1.34 and then by end of day it fell under $1.34 to $1.32. After the slide and close below support I was slightly worried, but figured ehh, I have a planned stop loss at $1.29 so minima loss if I stop out. Problem was the day before I had set my stop limit to be good until close, which meant that if the stop loss didn't hit then the order would be cancelled. Usually I set the stop as good until cancelled which means the order will stay until I actually cancel it. Well that hurt me a little in this case as I was away from my computer the day it fell and didn't see it till the stock was down to $1.26. Now that small loss has become a little bigger, I exited at that point and took a bigger loss than I wanted. If you look at SFUN chart you can see how hard it fell after breaking that support level, it went below $1.20.
HOV - This trade ended up being somewhat similar to the SFUN trade in that I felt we had a decent support level at $0.575. I entered this trade at $0.58 and saw massive bids at $0.575 which re-established and validated the support level I felt confident in. For about 2 days the stock stayed right at that $0.575 level and was just consistently taking chunks out of that $0.575 level. Finally it broke and the stock had a couple big legs down intraday and my stop hit at $0.55. That trade went about as expected from a breakdown standpoint, I planned an entry at $0.57-$0.58 with a stop at $0.55 and a price target of $0.61. I wasn't super upset with this one as I just chalked it up to one that didn't work out, I followed my strategy, had a good entry, just didn't work.
PEIX - This trade was what I like to call The Ultimate Rule Breaker. I broke so many of my rules on this trade its almost comical. First, a little background on this trade. This was a trade that I actually missed an entry on Monday from my Watchlist. This one I wanted to enter at $1.11, it opened Monday at $1.12 then proceeded to run up to $1.21 the next day. I was a little upset I missed that trade especially with HOV and SFUN not performing. After I exited SFUN and HOV I was looking for my next trade. Then I saw PEIX had come back down to $1.10 range again, chart still looked very good and I was hungry to recoup my losses from HOV and SFUN, so breaking one of my rules right off the bat, I dump my whole account into this trade. I was thinking man if this goes back to $1.21 I will make back my losses from SFUN and HOV and then some! (So dumb) So I dump about $10,000 into this trade. I planned a stop loss at $1.07 and was looking for $1.20+ as a price target. Stock immediately goes to $1.15 and I find myself up $500 on the trade, this was mistake number two. I am always looking to make 3-5% on each trade. I had it, right in front of me to take. But I wanted to hold for $1.20 so I could bring my account all the way back. (Super dumb) Well, some of you probably know this story all too well. Stock never got above $1.15, faded back to $1.10 and then next day opened at $1.07 and then went to $1.05. Mistake number 3, I had a planned stop loss at $1.07 but once it got to that level I realized I was down a bunch and felt like I should hold for a bounce back. This is also super dumb because I was trading this off technical analysis and a $1.10 support level I had drawn out. So if this stock broke that level, what was I still holding for? Hope? Yup exactly. And if you are holding a stock and the only reason is "You hope it comes back" well, buckle up because you are about to go on a fun ride to hell. The stock fell that same day all the way down to $1.02, at this point I am down a lot, mad at myself for taking this "revenge trade" and really I figured ok, hard stop at $0.99 see if it can hold up at $1.00, of course it did not and I stopped myself out at $0.99. This trade has so many lessons and mistakes in it that you should be able to live vicariously through me and think to yourself anytime you are holding or trading off of hope or breaking any of your rules.. take a second and think, wow TheBreadMaker lost over $1,000 when doing that, do I want the same thing to happen to me? The answer is No you do not.
I don't have much here for key takeaways as I have already outlined a lot in the above content. What I will say is this, I have been a trader for over 6 years, I have seen and been through a lot. You can see that everyone still will have bad weeks and occasionally get emotional when trading. So it's not just you that feels or gets that one, seasoned pros down to newbie rookies, everyone loses and everyone trades emotionally from time to time. The ones who can keep the losses to a minimum, stick to their rules and control their emotions the best are the ones that come out on top. Most days, weeks, months, years I consider myself to be in that category. This last week I was not. It is always a good learning and humbling lesson to go through and all of these experiences make me a better trader in the long run. Looking forward to bouncing back this upcoming week and getting back on the right track!
Hope you enjoyed reading about my journey for this week. Keep on following and commenting for future weeks. Looking forward to what everyone has to say this week!
Schwab Starting Account Balance: $10,244.31
Schwab Account Balance Week 1: $10,575.48
Schwab Account Balance Week 2: $10,656.07
Schwab Account Balance Week 3: $11,050.85
Schwab Account Balance Week 4: $9,378.88
I post a lot of charts and the trades I am in on Twitter, come interact with me there!
Just as a heads up, I have added $7,100 to my account. This will allow me to get in a few more trades per week. I have been fairly limited with only being able to get into 1-2 trades at a time and with a Cash account having to wait 2 days for a settle was hindering my ability to trade daily. I am adding the funds to allow for getting in 1-2 more trades at a time which should increase the number of trades I enter weekly.