I haven’t exactly had the best year of trading in 2023.
But there’s been a few bright spots…
Specifically, my weekend trade.
And last Friday was no different…
I stared at what I believed was a beautiful setup that checked all the boxes…
- Low Risk
- Massive Upside Potential
- Strong Catalyst
However, what happened on Monday surprised even me.
It’s a valuable lesson…and one in which so many newbie traders make a mistake.
But I won’t let it happen to you.
Table of Contents
The Weekend Trade
Lionel Messi is among the most popular athletes globally, with hundreds of millions of followers across social media.
And with his MLS debut last Friday, there was a solid chance I could see the ticker symbol MGOL pop on Monday.
MGOL has a licensing agreement allowing them to sell Messi-branded merchandise.
Of course, I realized everyone was buying his Miami jersey, which Adidas makes…but I figured there would be some good weekend press, and we’d see MGOL shoot up.
MESSI'S FIRST GOAL FOR INTER MIAMI AND IT'S A GAME-WINNER 🤯
WHAT A MOMENT
— Bleacher Report (@BleacherReport) July 22, 2023
Not only was his MLS debut better than anyone could have expected…he managed to score the game-winning goal.
I bought shares on Friday at $2.27…
Early Monday morning, it was trading in the $2.40s in the pre-market. I could have taken profits then, but I didn’t see much risk in the stock, so I decided to wait for the market open to see if it would do anything.
Guess what happened?
The stock did absolutely nothing…
And that’s why I decided to get out near my break-even price.
Shortly after, it started to sell off, dropping into the $1.90s.
Here’s The Lesson
So many traders fall in love with ideas and stock symbols…
- The market is gonna crash
- This stock is going to be the next GME
- The mother of all short squeezes
- So-and-So owns a lot of this stock
- According to this short report, the stock is a zero
They get all these ideas in their head…
And let them dictate how they’ll manage the trade.
But that’s not how successful traders approach the market…
You see, as much as I liked the MGOL idea…
I knew I could be wrong.
And I know better not to fight the tape.
Stop Trying To Hold And Hope
My number one rule is to cut losses quickly.
If a stock isn’t doing what I think it will…I GET OUT.
My opinion doesn’t matter…price is king.
I see too many stubborn newbies.
Refusing to take a loss…
…Refusing to believe they’re wrong.
But I guess social media has so many traders jaded…
They see all these fugazi traders online, posting these monster winners (never showing their losses), and they have newbies believing it’s the only way to win in this market.
That’s simply not true.
I’m very proud that I trade like a coward.
I know what this market can do to you if you get too cocky and let your ego dominate your decision-making.
Stop thinking that one trade is going to make you rich.
Believe me, I’ve been doing this for +20 years and have made millions.
The way you win is by taking it one trade at a time.
Focus on the best setups, and if you lose, lose small.
Want to learn how my team and I are navigating through this overextended market?