Angry…Frustrated…Irritated…
Something that most traders feel when they are just starting off…
And losing one trade after another can make you want to scream.
Trust me, I get it…
And there is nothing more frustrating than having the right idea in place and you lose money.
Throughout my career, I’ve been frustrated plenty of times with my trades…
And every time I am, I make sure I do these three things to prevent myself from getting off track.
Learn From Your Trades
I have nearly 7,900 trades in my Profit.ly.
And I share every single one of my trades on there.
While I’m never happy from a loss, and some of them can be incredibly frustrating…
I know that it’s all a part of the game.
Every day I review all of my trades, and it doesn’t matter if I made money or lost money…
There is always something to learn from them to help you improve your strategy next time around.
The more you dissect your trades and study them, the more you will learn from them…
Similar to how most students study for a test.
On Monday, I learned a very valuable lesson from my recent trade that has helped me be better prepared next time around…
And the one thing I realized I must do is be patient with my trades, and here’s why…
Have More Patience
Every morning I’m looking for stocks that are spiking…
Right now we’re in a market where there are a lot of short squeezes happening, and it’s critical that you remain patient.
Short squeezes can be incredibly powerful, sending some of them potentially Supernova…
But even if you missed their initial spike, you may still have a chance to trade it down the road.
Let’s take a look at one of my trades from Monday, Gorilla Technology Group Inc. (NASDAQ: GRRR)
GRRR was a short squeeze, and unfortunately, I wasn’t there for the early morning breakout.
I knew not to chase it at this point, and after it squeezed higher on Monday, there was one thing in the back of my mind…
Once a stock squeezes, it can happen again.
After reviewing many of my trades over the last few weeks, I noticed that these stocks have been spiking midday.
I noticed that GRRR was holding around the $6 per share mark, and I was hoping it would spike again.
I entered my trade at $6.13 and exited at $6.32, profiting $570. (Risked $18,390).
After this trade, I should’ve quit while I was ahead…
Instead, I decided to trade Alpine 4 Holdings, Inc. (NASDAQ: ALPP)
If you look back at the long-term chart, it’s nasty looking…
And as this was another short squeeze, I was hoping it would do the same thing as GRRR…
The only difference with this trade is I wasn’t patient enough.
I decided to trade in “no man’s land” – which is typically around 1:30 PM, or 2:30 PM EST.
It’s not quite midday, not quite the market close…
Not something I typically do.
The stock did bounce like I wanted to towards the close, so I knew I was on the right track…
But I was just a little too early.
Here’s how I traded it.
I first bought ALPP at $2.33 and then decided to double down on it and buy it at $2.24.
The stock didn’t bounce, so I knew I had to cut losses quickly to preserve my earlier gain, so I exited the position at $2.23 for a $550 loss. (Risked $22,850).
Here’s what I saw earlier, which made me think the stock could potentially bounce…
You can see where the stock failed to bounce the first time, and the second time…
And it got all the way down to $2.14ish right where the short squeeze first began and where it broke out earlier in the day.
You never know when a stock may bounce, and I noticed a wall of buyers around that mark…
And it goes to show you that trading is never an exact science, even when you’re strategy is spot on…
So don’t get discouraged with your trades, even when it results in a loss, and remember to control your emotions…
Because sometimes if you don’t, it results in overtrading and it can snowball quite quickly.
Control Your Emotions
Not being able to control your emotions can be the worst thing you could ever do.
Just because this trade didn’t work as I planned, I didn’t jump into the next trade I saw in hopes to make back my losses.
I knew my strategy was spot on, I just misjudged where the support would be.
And as it’s incredibly frustrating, I know that it’s all part of the game.
Remember to always go back and look at what exactly happened so you can be better prepared.
After reviewing my previous trades, I’m still focusing on stocks that are getting squeezed higher and looking to dip buy them when the time is right…
Losses like this don’t get me frustrated…
Simply because I know that I have a proven track record and I know my strategy is right.
Maybe my next trade works in my favor, maybe it won’t…
But 6 out of 10, or 7 out of 10 times it will…
And I’ll take those types of odds any day, and so should you…
But be sure to cut losses quickly to protect your earlier gains.
Stay confident, keep practicing, and don’t let your frustration get the best of you.
I’ll see you in chat.
-Tim
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