Hey guys! To be honest, this has to be the worst two trading weeks I have yet to witness. SPY is almost reaching new highs, what am I doing wrong?!
I wish there was a definitive answer to this question. Every time I buy a stock on the high of day break, the stock crashes on me minutes later. Every time I buy at support, the stock breaks below support. I have been noticing this in many of my trades. I play the exact set-ups I would a month ago but for some reason it is not working out. What do I do at this point? (I am sure that many of you are experiencing the same thing!)
I’ve had a couple talks with some penny stock traders and they told me that July was the slowest month of the year. So don’t completely blame yourself. Many traders take vacations/breaks at this time of year! A couple weeks from now, the penny stock world should be hot again. But for now, we have to ADAPT!
Here are some things that I have done differently in this slow market:
Play with smaller positions. Since there are MANY fake breakouts, I cut my usual position in half to reduce risk. If it doesn’t work out in my favor, I cut losses FAST! However, if the trade does work out I let it ride. Yes, it does reduce your profits. But in the end, we are trading to be GREEN in this slow market. Better safe, than sorry. (Don’t be too greedy, striving for 10% on a trade is always a safe bet!)
Only play the BEST setups. The worst thing you could do is over trade. When traders lose in a trade, they are eager to trade again to make that money back. Instead of play that 10/10 setup like you would usually do, you play that 6/10 setup because you want to make your money back. More cases than not, you will lose even more money. Let the setups come to you. Follow the volume. Patience is key to becoming a good trader! (DON’T FORCE TRADES!!)
Stick with a couple of stocks. There will always be that one stock that is very volatile throughout the day (Maybe even a couple if you’re lucky!). You can find perfect setups within these stocks. By mid day, you basically have mastered the stocks movement and you can become very profitable with just trading one stock throughout the day. Just because a stock is up 30% or 50% doesn’t mean that it can’t run 100%+! Remember, these are the stocks that EVERYONE has their eyes on, so liquidity won’t be a problem! (Some great set-ups I like to play are flag, double/triple bottom, and ascending triangle patterns)
Take advantage of the mornings. I’ve noticed that volume dies down drastically after the morning. Usually, I would take a long break after the morning because it would be VERY dead and I do not want to force trades. When I come back for power hour it would still be dead. When you see a mover 5-10 minutes after market open, do not be afraid to take a stab because there is a higher probability of it being the play of the day rather a mover at mid day.
Taking losses are completely normal. It is not the end of the world when you lose on a trade. Trust me, I’ve been there plenty of times. If you have a set strategy and reduce as much risk as you can, it is still possible to be profitable even in a slow market. We will get through it together! Soon, I will be back on my hot streak with my calls. In the end, we have to be grateful for the amazing month we had last month! Keep your head up and STUDY! Persistence and hard work will always pay off in the end! #TKE
