So you ask what happened?!
Well the day was going great. I was having an $1800 + day and then I went long at 39 and I did not follow rule #1 to cut losses early. I was so cautious yesterday and had a 100% green day with no losing trades and improved my win rate to 71.1%.
My mindset was this stock is now showing oversold on RSI and the shorts will cover and spike it up. Well it dropped more and I added around 38. I have been so good about using stops to protect profits but I did not on this trade. I usually go for oversold stocks and this was the reverse and outside of my comfort zone.
After making $1800 on the name I had superhero feelings. I felt like I could do no wrong with the trade. I got stubborn. Then as the loss got bigger I was in denial. Then when it broke down to 35 I was in shock and not sure what to do. Then I reflected and went into acceptance that I was bag holding and I would have to cut the loss. Looking at the chart it looked like it was going to drop more overnight than continue up. I did not want to be in the position as it continues to drop in premarket with sell offs and lose even more money. I let the loss get big enough and now it is time to accept it and move forward.
One of my good friends and great expert in psychology of trading, Mandi Pour Rafsendjani has a great article where she sums up the where feelings can cause that loss to happen.
Mandi has helped me with my emotions to try to reign them in and keep everything in perspective to profit more.
My big faults with this loss are :
- Didn’t cut the loss quick enough. I didn’t use a stop.
- I felt I could do no wrong with this name since I made close to $2K on it.
- Was hoping for action and denying the price action. Looking towards the future instead of being present in the trade.
So in regards to this painful loss I am taking a couple days away from trading to clear my head and work on my book. Not to mention deal with another incident of water damage from a giant rain storm. Sometimes life just happens.
I highly recommend that when you have a day makes you feel bad with trading step away for at least 24 hours. When Life happens prioritize it first instead of forcing trades with a distracted mind. It is important to be focused on trades when trading.
I had two $2K+ days and then another almost $2K day and the superhero mindset, I can do this, set in and caused me to have a bad loss. I know I can recover I just need time to digest and grieve and come back fresh.
I had a follower post on Profitly (AMR024) that they reached their first goal of $2K in profits and I am very proud to help people change their future. It takes time and hard work and practice to become consistency profitable. Those people that want the quick pick and immediate satisfaction usually will not be successful in the long run. The ones that study hard and improve themselves and study their trades will be more successful. So happy to hear that I’m helping others.
Being profitable myself is great, but sharing some of my tips and having others succeed is very fulfilling.
Thank you to my followers that have supported me today and reminded me of what I offer back that each loss is a lesson.
I love hearing feedback from you. It makes my trading more personal and I like to hear how I can help you. If you have questions or comments you can contact me here or on Profitly, Twitter, Instagram, LinkedIn and Facebook.
For my charting and level 2 I use Equityfeed.
This blog is for information purposes I am not a registered securities broker-dealer or an investment advisor. The information here is not intended as securities brokerage, investment or as an offer or solicitation of an offer to sell or buy, or as an endorsement, recommendation or sponsorship of any company, security or fund.