We all knew that it would happen eventually. I knew it. You know it. Everyone knows it and everyone has them that day trades in the stock market. Stock trading comes with their ups and their downs for sure.
What am I talking about?
I have been on a pretty hot streak this month of February and am happy that this red day wasn’t bigger than it was. I did a great job today of managing my risk when the trading was going according to plan.
Here is a screenshot from my first trade and the a screenshot from another trade that I took shortly after:
This leaves me with a loss on the day of about $40. Not bad considering how well I have been doing over the last couple of days.
I want to share with you some of the things that led to my red day today, so that you can learn and avoid the same mistakes.
Mistake #1: Becoming Impatient
Today was another one of those days where I had a timeline for the time that I needed to get done trading. So as 10 am EST approached, I began to look at other ETFs for opportunities instead of sticking with what I’m comfortable with (/CL).
This led to me taking a position on UGAZ, an ETF that I expressed I don’t trade as often because of the larger bid and ask spreads.
I did a pretty good job of identifying the overall direction, but I then tried to predict a reversal because of the volatile movement.
In the end, I cut losses and was able to leave the trade only in the hole for -$100.
Mistake #2: Trying to predict reversals
I have found myself to be incredibly consistent when I wait for confirmations of patterns rather than trying to predict when a stock will move a certain.
I love the concept of “the trend is your friend” and did not do a great job of trading with the trend today.
That is okay, it is something that I can use as experience when taking trades in the future in order to avoid making the same mistake.
What I mean by trading with the trend is that if a stock is already moving up, you want to by it as it going up, not trying to short it when you think it will eventually come down.
Mistake #3: Not waiting for the opportunities to present themselves
As I said earlier, I was on a bit of a time crunch so this one is not entirely my fault, however, I believe had I been able to sit at my computer for a bit longer than I would have had a better day trading today.
All in all, the day is not over and I still have plenty of opportunities to make this money back.
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Thanks for reading!
p.s. if you like this article, then check out this one as well: