So as I posted last week, my main focus for trading has been dip buying morning panics on hot stocks. I took notes last night on what I considered to be plays for today. DRWI was my main watch in the morning. Straight from my notes I said
DRWI $.64- Float of 6.57 mill. Down on the yearly chart. Has resistance in the $1.10-$1.20 area. Support was holding in the low $1.00 area. Breakout would be in the $.80 area. Up on a decent catalyst, nothing huge. Play this to the reaction. Up to $.92 in AH. Mid .60s should act as intraday support.
Well, according to my notes, I was correct on the overall chart holding $1.20 area as resistance and support being in the $1.00 area after it broke above former resistance in Premarket. I was in the parking lot at my work watching this panic in the morning and it dipped down to $1.04 and went up to $1.21 I believe it was all in the matter of 10 minutes. I called this dip buy play correctly aaaaaaaannnnnddddd I didn't trade it. Why? Well, I guess I just need more confidence, or more experience. I was upset with myself because I read this correctly, almost to a T and I didn't go for the dip buy. It was a perfect dip buy when I considered buying at $1.04 because it didn't drop below that from 6:30-7:00 am. (I live on the west coast and I start work at 7:00) It may have actually hit $1.01 before 7 I can't remember exactly, but I would have sold by that point because it tried retesting it's day high and there's no way that I would have given up a .17 cent per share profit. I think what I needed to do better at that point would be to understand my risk/reward in scenarios like this. At most, I had 3 cents of downside. At best I had .17 cents of upside. That's almost 7-1 risk/reward. It upset me at first because I could have grown my small account even more today. But, as I calmed my mind down I realized something.. I am on the right track and sometimes no trade is better than trading. Education takes time and the more I get used to this volatility, the more comfortable I will be buying into weakness. Dip buying is definitely the pattern that I think I understand the best right now and since I've been on the right track I will continue going with it until the market tells me to stop using this strategy. Yes, I have been focusing on different strategies lately as I realized I can not be one dimensional.
What I hope this makes a few people realize is this.. No matter if you call a trade completely correct and you don't trade it, there's no reason to be upset with yourself! Being on the right track shows that your studying is paying off and that you truly are learning how this game works. It takes time and there's no need to rush into something when you can just sit back and continue to learn. We have our whole life to make profits and instead of being degenerates and trading just to trade, continue to educate yourself. Nothing you do in life is wasted as long as you stick to your plans.
Again, these blog posts are more for my own notes. If anyone has a comment feel free. Good luck tomorrow to everyone that trades! Stay disciplined, go in with a plan, execute the plan, exit the trade if the stock doesn't do what you thought it would do!