I’m going to start right off and tell you that I lost about $300 last week, which I’m going to call paying tuition to the market. And to be honest with you I’m good with it. Because the lessons learned this week will more than pay off the $300 loss. If you’ve been following me on social media you know I posted that the only mistake you should be scared of making is the mistake of not trying. I definitely wasn’t guilty of that this week. There were no hesitation fouls because I was swinging. Like crazy!!! Honestly, it’s debatable whether or not I swung too much, but I digress.
I’ve been very transparent about my 2 biggest challenges. The first is developing my short game so I can write about a record day in a down market. That post is coming so stay tuned. The second is being able to trade in a sideways market. Up to this point, I’ve talked myself out of trading on those days because I just didn’t want to take the risk if the market made it’s mind up one way or the other after opening a position. But I know that to reach my goal of getting to $1 million, it will be imperative that I overcome these 2 challenges. The way to do that I believe is by finding the opportunity in my challenges. If you remember, I wrote a couple of weeks ago that there is always an opportunity.
This last week the opportunity I found was in enhancing my entry/exit points. In the past I had dabbled in MACD and even used it at times, but not yet this time around. After researching further, I found that it had a place that fit neatly into my strategy. Especially addressing sideways markets, in which I think MACD thrives. Additionally, as I work on my short game, MACD would help identify when to open the bearish positions. Finally, it would help refine my entry points on the bullish side as well. So I started using it in my charts on Thursday and this is what I came up with:
- Thursday – After a small jump, the market was down most of the morning before bouncing back in the afternoon. AXP had reported earnings, and was up big. I usually don’t buy anything that is up more than 2% on the day because of the risk it’s going to come back down. But by using the MACD indicator I was able to identify an entry point that got me a nice gain when AXP was already up big. After that I shorted the following: AAPL, BABA, CELG, DWDP, EA and MSFT. I took a loss on DWDP. The rest were ahead before the market turned up and all stopped out around even. Then I talked myself into shorting EA late in the day, which wasn’t a good move. So by the end of the day DWDP and EA accounted for half of the tuition bill.
- Friday – The market opened down and stayed down most the day so I thought it would be a perfect day to practice shorting. But first, like AXP on Thursday, I tried to pick up a post earnings run on LRCX. But I missed so I took a small loss. Then I started shorting. I hit on SWKS and WU. But I had some small misses on CVX, EA and XOM. In the end, Friday was another $100 of the tuition bill. The remaining $50 was from Monday and Tuesday, but I won’t bore you with those details.
In conclusion, I felt really good about the way I had been trading on Thursday and Friday even though I had those small losses. Mostly because I was actively trading in a mix of down and sideways markets. That to me opens up a world of opportunities to profit that I hadn’t been capitalizing on. So needless to say, I am really excited about this coming week. Obviously, earnings season is going to make it a fun and busy week and I’ll continue to refine my entry/exit points using MACD. As for MACD, I’ll share the details on how it relates to my trades in a later post. But tonight I leave you with a question. What opportunities have you identified in your business that resulted from profit losses? Comment below and let’s discuss new ways of identifying opportunities to profit.