Daily Recap: A Break-Even Day with Key Lessons

Today was a break-even day for me, marked by a couple of mistakes that kept me from turning a profit. I had the potential to close the day in the green, but a combination of moving my take profit too aggressively and taking a risky trade on a downtrending stock led to mixed results. After factoring in fees, I ended the day with a slight reduction in my account balance, bringing it down to $1,058.22. Here’s a breakdown of my trades:

Trade 1: ASST

My first trade of the day was on ASST, a stock that had shown some promising movement in the premarket. I entered the trade at $2.03, setting my stop loss at $1.93. As the price climbed, I moved my stop to a 1:1 RR, feeling confident enough to adjust my take profit target up to a 4:1 RR, hoping to capture more gains as it looked poised to continue its ascent.

However, that wasn’t the case. The price just tapped where my initial 3:1 RR would have been before reversing, and I missed the opportunity to lock in more profit. I got stopped out at $2.13 for a 1:1 RR, ending the trade with a profit of $20.96. In hindsight, I should have stuck with my original 3:1 RR target rather than moving my take profit. This has been a recurring issue where the times I move my take profit, the stock often doesn’t hit the new target. Going forward, I’ll likely keep my 3:1 RR take profit and avoid moving it, even when a trade looks strong.

Trade 2: PWM

My second trade of the day was on PWM, which had a news catalyst but was downtrending throughout the morning. Despite this, I convinced myself that it might turn around and entered at $1.31 with a 7-cent stop loss at $1.24. Unfortunately, the stock continued its downward trend, and I was stopped out at $1.24 for a loss of $21.06.

Looking back, I realize this trade was a mistake. I should have recognized that PWM was trending down and avoided it altogether. It’s a lesson I’ve learned before, but I need to be more disciplined in applying it: trading against the trend is risky, and without clear signs of a reversal, it’s often better to sit on the sidelines.

Overall Reflection

Today’s trades reinforced a few important lessons for me. First, I need to resist the temptation to move my take profit target and instead be content with a solid 3:1 RR. Additionally, I must be more cautious with downtrending stocks, either avoiding them or waiting for a clear and confirmed uptrend before entering. While today didn’t yield profits, the experience provided valuable insights that will help me refine my strategy further. Tomorrow’s another day, and I’m ready to keep learning and improving.