Small Time Trading

[benchman]

Some reflection on this day off.

Some quick history:

In 2012 I jumped back into the market. I hit a profit high for that initial investment on April 9, 2014 when I started this board. That profit high was around $16,000. I promptly started losing that money, and some of it in large chunks. I fell to around zero profit before starting to gain it back.

In June 2016, over 2 years after making the profit high, I made another one. This one was around $17,000. I again began losing that money, and some in large chunks pretty quickly.

Starting on November 2nd and going through December 21, 2017, I had 5 margin calls. On December 15th I had to deposit another $1,000 to stave one off. At this point not only had I lost the $17,000 in profit, I had lost another $22,000 on top of that. The low point was probably December 21st when ADOM closed at $2.37.

I have made a substantial amount of money back since December 21st, as I am back in a profit situation. That profit is $9,541.

The key now besides continuing to make money is to not go on another mammoth losing streak. I have looked into my mistakes, and they seem to be threefold:

1. Portion control. When I have averaged down on a stock on these big losing streaks, I have bought too many shares.
2. Too much emotion. I have gotten either angry or panicked with a certain stock, and then either bought too much or didn't take a loss when I should.
3. Inability to accept a loss. Taking an $800 loss on a stock sucks, but it's way better than $3,000-$8,000. On all the big losing streaks, I seem to have a couple of those big ones.

These are tough mistakes to correct, as I made the same mistake with KODK last week. I just got lucky and was bailed out by the stock having one more push left in it, or it could have been another disaster.

One thing that has helped me recently is the size my account has grown to in the last month. Also, during the lean times being able to borrow money and put it in my brokerage account was helpful in being able to make a comeback. Without that, I would not have been able to reap the rewards of the rebounds in ESV and ADOM.

This week I will be withdrawing $15,000 to pay off one of the credit cards I borrowed from, so the account will get smaller. Hopefully, I can avoid past mistakes and keep this win streak alive despite that.