Grabbing this losing streak by the horns and riding the bull! Today I want to talk about the 3-week losing streak that has been taking me for a ride. Now, if you are new to this then perhaps you’ll want to visit this post again in the future but let this prepare you for a time that every trader seems to encounter at one point in their journey or another.
Sound scary doesn’t it? Well mine was well needed!
What?! A losing streak that was needed, well how is there such a thing?
Let me explain!
$BLSP Morning Panic Dip Buy
This is when it all began… The day started like any other. My morning consisted of preparing for which stocks would have a big panic followed by a bounce. $BLSP was on a nice run and calling my name. Wednesday gave me a nice return on a panic dip buy so my conviction was normal. My best month and great start to the new year! Unfortunately, the week prior to this, I accidentally doubled up due to the beginning of broker errors. This mistake caused my 5% loss of normally $60 after fees and commissions to become over $100 loss. Little did I realize that that loss took out about half of my profits from the beginning of the month taking solid singles.
My goal had been $10 a day as that would slowly compound over time and My account would begin to grow.
$BLSP began its panic. As you can see above the first couple green candles were followed by a little bounce but ultimately continued lower.. The next step down below the 2nd purple line outlined with a green box was where I entered. Underneath where the volume candle sticks are shown, shows green volume that equaled the size of the red candles. In my mind the green was about to overwhelm the red as you can see during the next leg down.
During the trade, I saw the increasing buying volume that panicked past a key support line that I had placed. Now I was faced with two choices… .02 cracked but barely. To me the stop losses weren’t many which is why I thought the buying power was overwhelming the sellers causing that .02 area to hold and be the time of the bigger bounce mixed with the 20% roughly panic that took place. Ultimately I was wrong. My fill happened on the red candle after the green but just before that big continued panic candle.
I quickly placed my sell order under the best bid to about .0192 which wasn’t enough. Knowing what I know now, the sell should have been placed at .018. My confidence went out the door. Another loss of 10% or higher has happened. This was my first mistake of the month and enough to wipe out my entire months worth of profits and turn me red.
So how did I decide to exit?
After enough experience in the same scenario I patiently waited for the panic to finish.
This lead to another decision I was faced with.
To add or not to add?
My account size is small and buying power minimal. My choice was to wait for a bounce to sell into. Ultimately had I been able to exit then I could have rebought around .015 and sold into .017 where I ultimately exited for that 13% loss. Yes.. on the bright side I only lost 13% when I could have lost about 20%.
Nearly every day following for the next 2-3 weeks has been accompanied with losses. Dip buying morning panics.. my bread and butter strategy turning against me!
That’s what it may seem like to an outsider or a trader with the WRONG mindset.
THIS HAS BEEN THE BEST STREAK OF LOSSES OF MY LIFE!
CRAZY?! Not exactly.
There IS such a thing as a good loss.
As a trading challenge student – a fellow student reached out to me – he simply explained to me that we have the ability to reach out to the staff and be assigned a personal mentor to help guide us with one-on-one time. Now, I have heard of another trader I speak with how he has weekly meetings but I never asked how to go about that. Previously I didn’t feel I needed the help.
That last loss got to my head though. Devastation of the losses wiping out my account really caused a stir inside of me. I turned to messaging successful traders for advice. They have years on me and they all assured me they have been through the same. After all, why would a streak of losses spare me?
My only issue… I followed their advice on trying to cut quickly. To smack below the bid. To read the tape. Make sure I exit once the stock felt wrong. Was I not fast enough? How could I be better – I spent hours reviewing my trades. Why did I enter early? Did it not panic enough? What did TraderSync tell me? Early entries have been my biggest flaw! Now how do I combat this consistent habit?
Every day I spent time pacing around the house contemplating that trade over and over in my head. My family kept asking what was wrong and that this didn’t make me a bad trader. They continued to be encouraging and tried to convince me to let it go. Such a simple task felt impossible. It stewed.
I couldn’t figure out how I could have done better. As soon as I received the contact information to setup a meeting – I sent the message within the minute. My meeting was setup soon after.
It’s Okay to Ask for Help
Don’t fix something if it’s not broken… A very powerful statement.
Something may not be fixed but the process of trading is a constantly moving target which means improvement and adaptation are necessary to hit the target. My biggest flaw was pointed out to me.
My first meeting with Joel Sykes was a success! Yes, this is Tim’s dad. He assured me that the event I experienced with $BLSP is what he calls “The Black Swan”.. These happen out of our control. There was no way I could control getting filled on a red candle when it showed signs of spiking. – Quickly I mentioned the thought of my adding at the bottom.. he replied back instantly that this was a skill for experienced traders. – Next he told me as the stock hit 3% my hair would fall out if I didn’t cut it. This amongst other tools prepared me for battle. Oddly, it worked!
After our conversation I felt I was equipped with the tools I severely needed.
My losing streak continued.
My Losing Streak Continued
This was Not the End
Our first conversation was 2-3 weeks ago. Since then I had lost nearly every morning panic dip buy due to entering early on the fakeouts. Same thing you see from the above image. Why not just wait you might say? Well, the times I wait the stock spikes. This is an art more than a science.
Anyways, I AM SO THANKFUL FOR THESE LOSSES! Checkout my Profitly Chart and you can see my trades. Why would I be thankful to be on a 2-3 week losing streak? By entering nearly every trade early, I am now SO FAST at realizing when the stock is going against me that I can now exit a trade within seconds for either breakeven or tiny losses. Because of all of those tiny losses that were all 2.6% or under I can have a couple singles 6-10% profits that wipe out all of those losses!
The point is… I had to endure that big loss in order to improve my ability to read level 2, to understand the market, and become faster at exiting a stock without giving it another chance. Want to know something else? My ability to cut so quickly opens up the opportunity for me to reenter at a better price when the stock actually turns…. as long as my broker executes my order. (Broker issues lately are for another blog post).
Moral of the Story
Every Loss is a Lesson
Now my apologies for not writing in awhile but these posts aren’t to be consistent each week, but rather to provide valuable lessons that bring me enlightenment on my journey that could potentially help others too. A documentation of my experience.
Now, where is my journey today? This is where broker issues do come into play. My losses have still been happening but not in a way that couldn’t have been made up for. Since the Robinhood Fiasco (incase this post isn’t read currently here is a link to what I am referring to) brokers have been facing an overwhelming amount of traders on their platforms that issues have been occurring. My turn was inevitable. After traders mentioning issues I have definitely had my fair share as well. Generating orders causing missed trades, invisible executions that aren’t verified until after the entire trade has been completed, missed fills, amongst many other issues.
Perhaps my month would be green if the issues weren’t happening, regardless, my trading has improved.
So what’s the next step?
My expansion into other setups… Will add that segment to a future blog post.
Key Take Aways
Never Stop Learning
Hopefully after reading this post you become inspired. Don’t get discouraged if you are facing loss after loss with no end in site. There is light at the end of the tunnel, especially if you have the proper education!
Never fear as there are always wonderful lessons to be learned. Some of the most valuable lessons that save traders in the future come from their biggest losses. Many traders even experience their best trading days after their worst losing ones. But the lessons that stick with you early on can only help prevent the same mistakes from happening in the future.
Truly, the value of a loss is ironically invaluable if you manage to listen.
Anyways, hopefully this helped you a little.
Know that every trader experiences a low period in their joinery so you are not alone. The difference comes with how you handle it!