Another day, another dollar! This morning was rocky for me stock trading, however, I was able to end my successfully in the profit for $352. I have a few important lessons that I learned today that I want to pass on to you to help you in your journey of becoming a profitable stock trader.
Here is a snapshot of P/L for the day:
I was would have been in the green a lot more had I not made a few mistakes in the beginning of my trading day.
Let’s talk about the mistakes first:
Mistake #1: Entering into a position as soon as the market opens
I have found that every time I enter into a position as soon as the market opens, it is almost always a red trade. This is because the market is so volatile when the bell rings and it is very hard to identify a solid direction.
It would be better off to wait to wait 5-10 minutes so that you can have a true confirmation of a trend and potential to profit.
Mistake #2: Not being patient when entering and exiting positions
Not to be a FOMO (Fear of Missing Out) post, but I tended to lock in profits too early.
Also, I wasn’t being patient enough when I entered too small red trades because I didn’t wait for confirmation of a true direction of an uptrend.
Only on in my stock career, I would enter a position and try to predict a reversal instead of waiting for confirmation, and this would lead to a lot of red days.
Confirmation is when the EMA (Exponential Moving Average Line) is showing signs of a reversal or a horizontal pattern.
Now on to some of the things that I did well:
Success #1: Identifying Overall Direction
This morning, I had a great sense of the overall direction that the stock was heading which allowed me to day trade it effectively. On the uptrend and even on the pullbacks.
Success #2: Cutting Losses Quickly
When I did take bad trades, I was able to quickly identify them and cut losses quickly to avoid letting bad trades get worse. This is something that I struggled with as a beginner as well because I would get too attached to a specific trade.
If you want to learn how to make money from your phone or computer, like my Facebook Page The Centennial Investor and join our free private Facebook Group where you can connect with other stock traders like myself.
Thanks for reading!
p.s. if you like this article, then check out this one as well: