This week I experienced several big losses and learned lots of lessons form them. I did not do well (actually badly) in the ships' party. Before I was doing swing trading which may last several days to couple of weeks and did not have to react so fast. But penny stocks was more volatile than I expected. I hesitated too much in locking in profits and cutting losses. 

On Tuesday, I did dip buys after the morning spike. Everything went well until I had to respond to my son's request and left for about 5 minutes.  The winning positions (about $4000 unrealized profit) became losing positions, and I have a loss of about $3100.

On Thursday, I was too eager and bought the ship stocks after seeing a small spike and lost $3500 as the stock dropped abruptly. Hoping the ship stocks will go up, I took revenge and bought another one. Totally I lost $5400.

On Friday, I lost $1200 for the same reason: Diving in too early and longing for a rise after the drop.

General experience: Intraday trading is different from swing trading and the penny market is very volatile and ruthless.  

 

Lessons learned:

(1) Cut loss quickly

(2) Do not follow alerts 

(3) Lock in profits     

These were reminded over and over by Tim. 

 

Do immediately:

(1) Focus on one trade at a time

(2) Reduce the position sizes

(3) Reduce the number of trades -- sniper mode

(4) Do swing trading when necessary

 

Some trivial things

(1) Be familiarized with Thinkorswim and figure out how to cut loss quickly

(2) Set up an account on IB or eTrade so that I can trade both directions

 

Next:

(1) Lay out my own scanning and trading rules  

(2) Refine my trading plan: Entry/exit signals, stock picks, and indicators, etc. 

(3) Study the price actions of penny stocks

 

Psychological development:

(1) Patience

(2) Conquer of greed

(3) Confidence 

which all depend on the maturity of my technical skills  

 

Penny stock trading is challenging and fun, and I have a lot to learn. I am still adapting myself to Tim's style of teaching which is very informative but not very structured and trying to extract the information that he keeps delivering. The more I learn, the more I appreciate the beauty of simplicity that he is promoting.