At the end of week 5, I was feeling very happy with the changes and improvements I had made on the strategy and adherence to it. The week was positive and while I was not at the level my account was targeted to be at, I was making a nice gain to catch back up. Now let’s take a look at what happened during week 6 and identify my plan moving forward.
PREVIOUS POST: If you want to follow and read back from where we started into week 6
Learning to Day Trade
Day Trading Log week #3
Day Trading Log week #4
Day Trading Log week #5
Compound Tracker
I started the week strong, small gain on Monday followed by a really good day on Tuesday. Felt like I was making really good choices and would catch back up to my compound goal before the end of the week.
Wednesday we tanked due to emotions and trying to predict the market. I will cover this more in my reflection area but I made a lot of poor choices and did not stick to my plan and strategy. This made me get emotional and I tried to spend all day Thursday averaging down with a hope and a prayer that I would get lucky with a retrace by Friday.
I had no buying power on Thursday and Friday and I rode my emotions to basically nothing. See reflections for the full details and analysis from my side plus the plan moving forward.
Reflections
I want to start this reflection section out with an important fact for anyone reading this to know, while this challenge port was being blogged about for you all, I obviously have multiple private accounts that I manage in the background. I have a private day trading account which is funded properly and has a much larger buying power. Comparatively over the last 2 weeks, my private day trading account is a net positive $4000 while this challenge port has dropped about $1000 in total.
I intend to break this reflection up into two separate points. Point one will be focused around what I did wrong this week and what I learned about myself and my failures. The second part is going to be my reflection over the past two weeks on why my private port is growing and making good plays and my challenge port did not make good plays. Finally, I will identify my plan moving forward with this challenge port and what I intend to do next week.
Let’s get started with part one and reflect on what I did wrong this week.
EMOTIONS!!!! and fighting the trend for a given day.
The week started off really well and all of my plays were hitting around what I was expecting and thought they would. I was playing the charts and the trends and I was making money. Looking at most of the buy and sell times, I was able to make quick profits and get out or leave runners with stops at a nice profit.
The biggest problem for the week was on Wednesday which was the FOMC (Federal Open Market Committee) meeting where the latest interest rates and projected inflation numbers were presented. Typically the FOMC meetings cause volatility in the market and instead of waiting to see what the market was going to do, I let my emotions and impulse guide me and I took some gambles early in the day to the down side.
When these gambles did not pay off and the market continued on its uptrend for the day, instead of maintaining my rules and cutting the loss quickly, I thought to myself “most of these contracts expire on Friday and we can’t stay green all week”. Well I held those 4 plays to zero in the account……. Do not do what I did kids.
The most important thing I can off you all reading this is to provide some data on what I learned and what is next. Right now I have two hypothesis on this whole experience. First, I see one of my biggest problems was the mindset of sharing everything publicly on the blog and social media. For me, I am a typical Virgo with ADHD which means I am always right. So when I took plays that didn’t work out, I get stubborn and hold them way to long in order to show to you all that it worked out. I set rules in the beginning and I never followed my rules and most of the time it was because of the gamble to be right and to not show you all bad plays.
The second, and more important, is that I found it harder to manage a smaller portfolio while trying to grow it by 5% every day as we set forth in this challenge. When the portfolio is small, it is easy to take a larger play and have it go bad. When you get into a play that is 30%-50% of your portfolio size, you have little to no room for scaling or making a move. When the play is that high of your port it is also harder to recover from even the 10% loss rule we set up.
While running this small port challenge I was also making different plays on my large account and as I said above, that account had a really nice week. It was up about 6% total while this challenge port was down 100%. It was very interesting when i looked at how i manage both ports and my plays where entirely different and also I was more adept to swing things in my large account because I was not focused on a 5% compound daily gain.
Moving Forward
So what is next?
I am going to fund the account with $1000 and we are going to run a new challenge together. I do not know what we are going to challenge ourselves with yet. I do know however, we are going to set rules and stick to them no matter what. As long as my private port continues to have the weeks it has been having, I am ok to play and challenge myself a little on the side. Even it is ends up for a loss.
The biggest thing I can stress to you all is that even though I lost money, I learned a lot of good lessons about myself and my style that I can carry forward.
