Daily Recap: A Day of Challenges and Learning

Today was another challenging day in the market for me. I focused on waiting until at least 10 minutes into the market open before initiating any trades, which I accomplished successfully. The small cap market, however, was quite slow, with low volume dominating the trading environment. I ended the day with a loss of $28.75, bringing my account balance down to $1,264.23. Let’s break down the trades.

Trade 1: TKNO

My first trade today was on TKNO. I decided to buy at $3.40 after observing a pullback from an initial ramp-up. I set a tight stop at $3.33, ensuring a good spread between entry and stop loss. The price did rise to a 1:2 risk-reward (RR) zone, but I missed the opportunity to adjust my stop loss to break even at that point. Consequently, the price dropped, and I was stopped out at $3.33, resulting in a loss of $12.25.

I was pleased with my position size adjustments on this trade, as they helped limit my loss and provided an opportunity for a 1:2 RR. However, the volume was not high enough to sustain momentum. In such situations, setting a sell order at a 1:2 RR when volume is low might be a better strategy to secure quick profits.

Trade 2: NAAS

My second trade was on NAAS. Despite the low volume, I saw a potential entry during a pullback, with sell volume appearing low. I entered at $7.05, which, in hindsight, was too high. I set my stop at $6.83, creating a 22-cent spread between entry and stop. This wide spread did not allow for a favorable risk-reward ratio. Although the price initially rose slightly, it eventually fell due to a few large sellers, and I was stopped out at $6.83, resulting in a loss of $16.50.

While my position sizing was effective in minimizing losses, the low volume on this stock suggested I should have avoided the trade.

Reflections and Lessons

Today’s market conditions were challenging due to the lack of high-volume opportunities. I need to remain patient and wait for better opportunities, or refrain from trading when volume is insufficient. My awareness of entry and stop spread has improved, but I still need to avoid trades with high spreads that don’t offer a good risk-reward ratio.

Continuing to refine my strategies and learning from each trade will be crucial for my progress. Tomorrow is a new day, and I’m committed to making better trading decisions.