How to Mess Up 23% Gains (10 days work) in 1 Day

So far in 2021 my account is up 23%! Until yesterday. I can point to a few reasons why my account is now lower but really it comes down to one main reason which I’ll point out later. First let me go over how I got to 23% gains from January 1-14.

My account showing 23.77% gains

From January 1st to January 15th I’ve made around 225 trades. As of right now I would say I am a day/overnight trader. I’ll make trades where I get in a stock and out in the same day. I then buy into positions later in the day that are meant to be overnight holds that usually I sell the next day. I actually want to get better at holding longer, but for now it’s a hard for me to see gains and not take them. I realize bigger money is made holding and I absolutely could have made bigger returns if I would have held certain positions I was in for longer as opposed to jumping in and out of stocks like a degenerate. lol

My biggest winner this year so far is $BTBT. I made 33% on a day trade January 12th. I bought near the lows and began selling throughout the day and into the next day. Other winners for me this year have been $X, $GRWG, $VERU, $SPCE, $LMND, $JMIA, $XXII, $DGLY, $CEIX, $PLG, $MRO. My biggest loser I actually may be holding currently, I’m in a couple positions currently that are down a fair amount. Aside from what I’m holding my biggest loser so far is 4% on $SNOW. Other loses I had were many of my big winners mentioned that I initially got stopped out of once or twice.

OK so as I said, a few of my current holdings are down a fair amount. Way more than I should have allowed and the number one reason for this is I stopped using hard stops. For 2 days. Thus far they are the worst two days I could have stopped using hard stops. I’m in one position that is currently down 11%, and 3 others that are down 5%. I ‘want to be in these stocks’… you can say I’m mentally married to them for now. I do believe that they will be higher at some point. But right now they are not. My brain says they will be higher… the charts are not saying that currently. All of the charts have definite lines in the sand via moving averages that if they close under I will sell and I’ll have a no good very bad day. I’m hoping (hopium doesn’t work usually but is a helluva drug) that these lines in the sand are areas of support that hold, the stocks turn back around and I make a ton of money and buy an island somewhere. But you read that sentence and realize how ridiculous and juvenile it is and therein lies the problem. I’m thinking about what my gains can do for me as opposed to what loses could do. I have failed to follow rules and mitigate risk and now I have pain. Pain that if I sell everything now will cut my year to date gains in half or potentially worse. All because I didn’t put in hard stops. We’ll see what happens, maybe I’ll start practicing holding for longer and these bags will be full of cash (again…read the problem).

Hopefully I’m not the only one getting something out of this quick post (reflection/therapy). Use hard stops if you want to survive. Don’t ‘marry’ your stocks. Cut loses, you can always buy the stock back. Before this my average lose was under 1%. My hard stops were working in my favor. I had just started to get a good flow going based around my stops. I added to my capital this last week and while I was adjusting to that I stopped using hard stops and now I’m watching my newly added capital deteriorate as if I never added it.

Going forward I don’t think this is a market crash or even a heavy correction. $QQQ has support at $310 then $305 before it gets really nasty. $SPY looks much better and $IWM continues to lead. If anything this is a buying opportunity (I did start two new positions with great risk reward that are green and yes, hard stops are in!). Also, I could be totally wrong and the market goes to zero never to return. Always follow price action (and use hard stops!). Thanks for reading!