At market open PEIX moved up, and while still below my entry point, it made the pain considerably more tolerable. Then it plunged down, only to respect the trend line and bounce back up.
In retrospect, my freaking out yesterday had more to do with me not being used to trading this size of an account rather than selecting a bad entry point.
In fact, entry point value was actually ok, as the price just exceeded an earlier high. What I should have done better would've been to realize that the intraday run was overextended, and that while posting a new high, the stock was in need of planting another foot down before continuing the move up.
Ironically, I may have made a very similar mistake again today. But more about that later.
Back to account size; even with my entry point, my downside risk was 3%. Could it have been under 1% if I thought more along the lines from the paragraph above? Sure, but we all know it now after the fact, don't we...
Anyways, as I said - my freakout had to do with $$$ value, as if I did not know better. Since Im building my account, I am greedy, I am agressive and I'm playing for all the chips, using all my chips. And when you see your hard earned money go red in $$$ rather than % its easy to get your head foggy.
This is the one thing I used to like about Forex trading - that you won and lost PIPS rather than $$$, even though its ultimately all the same, it's mentally less taxing (I did 2 months of Forex trading training with Maverick FX prop firm but realized that hectic and random schedule of events influencing it were just too hectic for me. For once in my life I actually got to appreciate the structure forced upon me (regular market hours)).
Luckily my yesterday's freaking out was channeled through my loud panic aka writing, instead of panic selling this morning. As you learn in sports for example - there are different levels of believing in something... An outer level of "loud" thoughts saying "I can do this", as if you are convincing someone else but you dont necessarilly trully believe it. Then there's a little more quiet thought of "I got this", while leaving room that you may not be able to accomplish it afterall. And then there is the rock bottom conviction of "Done motherfucker" that needs no explanation. The best part is that all these are just levels of inner monologue/conviction.
When it comes to trading and risk/panic management, I find myself to have very similar levels of risk/panic tolerance. Yesterday's blog bitching was one level above all those, as it was out loud in a way.
Anyhow - I held PEIX throughout the day today. I noticed it coiling up, as the "feet planting" became more frequent. It finally bounced just before 2pm and ran up into the close. It went as high as $16.10, then sold off in last 5 minutes and closed at $15.87. The resistance that it needs to break to confirm the breakout is >$16.30.
As mentioned above, I may have made the same mistake I made yesterday, only today it wasn't entirely my fault. Simply, I held it overnight without taking profit since I had to leave for rowing practice that I coach, which this week starts at 4:00pm. It was only after I left my PC that the it went significantly more vertical, and there was no way that I would be making a call on something like this from my phone in a car. While moving. lol
The reason I say its the same mistake is because the chart now looks overextended intraday and could easily pull back down all the way to $15.20 without hurting the trend. However, that would wipe out my today's gains. On the other hand, I was thinking that it may gap up tomorrow, and that if it doesn't - Im still playing with house money.
How ever it comes out, this is yet another lesson.
Hopefully learned.
This week as a whole screams: TAKE PROFITS!
Simple.
This week as a whole screams: TAKE PROFITS!
Simple.
But not really.
It's a tough balance to learn, when to lock in profits vs. letting your winners run.
We'll see. Cheers.
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