Daily Recap: Adapting to Quicker Scalps and Improved Risk Management

Today, I initially planned to use 5-minute and 15-minute charts. However, after analyzing some small-cap stocks last night, I realized that this strategy did not offer a favorable risk-reward ratio and seemed too slow for my trading style. I decided to revert to the 1-minute and 5-minute charts, ending the day with a profit of $39.25, bringing my account balance to $1,215.31. Here’s a breakdown of today’s trades.

First Trade: SILO

SILO ramped up well after the open, and I aimed to catch the momentum. At 7:36, I noticed a pullback and entered the trade at $2.92, setting a stop at $2.82, the previous 5-minute low. The price increased, followed by another pullback. I held on, anticipating another rise, and exited on the third pullback at $3.20. By moving my stop loss up as the price rose, I confirmed a 2:1 and then nearly a 3:1 risk-reward ratio. This strategy ensures that even if I get stopped out, I secure at least a 2:1 ratio.

Second Trade: NAAS

In hindsight, I should not have taken this trade due to the unfavorable risk-reward ratio. I entered at $5.87 with a stop at $5.60, a significant gap. Realizing the potential gains were minimal for the risk, I moved my stop loss to $5.87, my break-even point, and got stopped out with no loss. This trade highlighted the importance of assessing risk-reward before entering.

Third Trade: SILO

I attempted another trade on SILO, which was a mistake as my third trades have not been successful lately. Motivated by my break-even second trade, I entered at $4.18. However, the momentum had significantly slowed. With a stop loss set at $4.05, the low of the pullback, I got stopped out at $4.05, resulting in a $9.76 loss.

Reflection and Lessons Learned

Today’s experience reaffirmed that the 1-minute and 5-minute charts suit my preference for quicker scalp trades. These charts help me maintain strict stop losses and better manage risk. I improved my position sizing today, taking smaller positions to keep my overall risk lower. Patience remains a key area for improvement, as does avoiding trades when momentum has faded. Additionally, reducing the gap between entry and stop loss is crucial to secure worthwhile gains.

Overall, I’m gaining confidence in my quick scalp trades and refining my strategies to enhance performance.