Daily Recap: Learning the Importance of Taking Profits

Today was a valuable lesson in the importance of not holding onto a stock for too long. I made only one trade, investing around $980 in GMM, and ended the day with a modest profit of $8. While a profit is always better than a loss, I could have walked away with nearly $40 if I had taken my profits sooner. My hesitation and greed led me to miss out on a better return.

Here’s a breakdown of today’s trade:

Pre-Market Analysis:

I was monitoring several stocks in the premarket, but GMM stood out due to its volume and potential. It had gapped up slightly, indicating a possible opportunity.

Market Open:

At the market open, I observed GMM for a few minutes to avoid getting caught in the initial volatility. When I saw strong buying momentum, I decided to enter the trade. Unfortunately, I placed my ask order a bit late at $1.225, which wasn’t ideal. If I had entered earlier, I could have secured a larger profit.

Price Movement:

The stock was highly volatile, with rapid price fluctuations. It reached a high of $1.30, where I should have taken my profit. The candle at that point was an inverted hammer, signaling indecisiveness in the market. I missed the opportunity to lock in a $30-$40 profit and ended up holding too long.

Closing the Position:

As the price started to drop quickly, I managed to flatten my position and exit with a small gain of $8. Although it was a minor profit, it was better than taking a loss.

Reflection:

I was disappointed in myself for not cashing out when I had the chance. This experience reinforced the importance of sticking to my 2:1 profit/loss ratio, which would have meant taking profits at around $40 in this case. Despite the small profit, my account is now up to $1,039.46. Slow and steady progress is the key, and with discipline, I hope to maintain my gains even with a few losses along the way.

Today’s experience was a good reminder to always take profits when they meet my targets and to avoid the trap of greed. Onwards and upwards!