Daily Recap: Lessons in Poor Entries and Downtrends
Today was a tough day in the market, marked by poorly timed entries and resulting in a red day. My biggest takeaway is the importance of ensuring that my entries align with an established uptrend and not at the beginning of a downtrend. This is a crucial aspect of refining my strategy that I still need to work on. I ended the day with a loss of $33.99, bringing my account balance down to $900.09. Let’s break down the trades.
Trade 1: MRIN
MRIN caught my eye today with some news that caused a slight gap up in the premarket. As the market opened, the stock showed some initial momentum, and I attempted to play the pullback. However, my entry at $2.26 was poorly timed, as I failed to recognize the stock’s downward shift. With a stop loss set at $2.16, I was quickly stopped out for a loss of $17.54. In hindsight, I missed crucial indicators, such as the flattening of the price action and an impending negative MACD cross. Had I been more patient and attentive, I could have avoided this trade or entered at a more favorable point, potentially turning a profit.
Trade 2: MGOL
My second trade was on MGOL, a stock that showed continuation from yesterday’s premarket activity but lacked any real news catalyst. In retrospect, this was a poor choice from the start. The stock was downtrending since the open, and I entered at $5.33, hoping to catch a brief upward movement. Unfortunately, the downtrend continued, and I was stopped out at $5.11 for a loss of $16.51. The key lesson here is clear: avoid trading stocks that are not in a solid uptrend, especially when they lack a news catalyst to support momentum.
Conclusion
Today was a day full of mistakes, primarily centered around my entry decisions. Moving forward, I need to be more selective with my trades, ensuring that the stock is not only trending upward but also showing clear signs of continuation after a pullback. Refining this aspect of my strategy is essential to improving my consistency and avoiding unnecessary losses.