NFLX Trade on Jul 17, 2020 09:35 from CapitalMastery: Tradervue User Stock Trades.

Summary

Took an outsized loss on this trade right off the open due to being too large. Although my lot size indicator was showing NFLX at 10 shares per lot, it should have actually been 5 shares per lot. But it's my fault for not double checking, as I already had a hunch this was wrong from yesterday's trading. In hindsight, at 40 shares, I was nearly double max size on NFLX today, when the entry signal wasn't A+; that is what led to an outsized loss. Had I only been in 15 shares, my stop out loss would have only been around $120, instead of nearly $500. This loss would have been within my normal ranges, and therefore a couple winners could have overcome in.

While taking an outsized loss due to incorrect position sizing didn't help, that's not really the problem with this trade. In fact, the initial trade on NFLX wasn't a terrible trade. I had a bias, waited for an entry signal (although jumped the gun on first entry), and had a clear stop, which I honored. That's what a good trade looks like. The problem with this trade is how I reacted to the loss emotionally; I went on tilt, and into "make it back mode". Not only was I fighting with my risk manager on this trade, but after getting back to a reasonable loss, I started taking more and more risky trades; gamble trades like yesterday. It started with NVAX, and then MRNA. I turned a $500 loss to a $200 loss, and then a $2,000 loss, to finally a $67 loss. That is erratic, emotional, gamble trading. I will never be able to build a serious trading career, let alone provide for my family, trading this way. It's extremely necessary that I get a handle on this psychological weakness to taking losses.

Did Right

• Had a premeditated bias for this trade based on earnings results, and subsequent price action
• Waited for an entry signal; although I admittingly jumped the gun. I can work on being more patient for good entry signals, but the fact that I was waiting/looking for an entry signal is a great start.
• Had a pre-planned stop, which I wish I would have thought through prior, but happy I scrambled to find a reasonable stop, which I ended up using the prior pre-market low.

Did Wrong

• Used too big of a lot size
• Jumped the gun on my entry signal
• Added to my position without a good reason to do so; was just happy that it was going up more so wanted to be sized up, but "going up" is not additional confirmation for sizing up.
• Got back into a position after being stopped out without a re-entry signal, although I admittingly was thinking it was a dip and rip. In these situations, I should really wait for a pullback, or even better a new re-entry signal, which in this case would have been at 9:57. While thi ultimately would have been a failed trade, it was still a good trade in my book. I would have gotten stopped out at $486.39, but would have been given another re-entry signal for the long at 10:40, with a great entry price on the subsequent pullback at 10:45.

Improvements

• Fix position size indicator (done)
• Be patient, and wait for your entry signal; especially on a volatile stock like NFLX
• Brush up more on the opening entry signals based on bias and pre-market price action, and where the stock opens in relation to it's 5min 20ma. I should instinctively know where to enter, stop out, and where my first exit target should be.
• When trading a stock for the first time, be sure to research it's prior price action, and try and get a feel for it. At least look up it's stats on Finviz.
• Consider being more scalpy when trading new volatile stocks for the first time. Had I traded NFLX like I normally trade a BA/ROKU, could have scalped some nice gains.
• Work on and practice staying calm through losses or a trade not working out. This is crucial to you being able to take a step back, reassess, and re-attack the trade once a re-entry signal appears. Had I 1) been properly sized, 2) Been more patient for an entry signal, 3) Kept my emotions in check when the initial trade didn't work, I could have entry re-entered at 10:45 for a $7/share gain, which would have made this trade green on the day.
• Get at least 8 hours of sleep so I'm emotionally sound during the trading session. I'm starting to feel that this is probably causing my tendency to go on-tilt without me realizing it.

Next Trade

NFLX basically bounced off it's daily 20ma. After a day of solid selling, I would expect NFLX to rebound nicely in the coming days, but I'm also open to the possibility that it sells off some. Either way, I have full faith that once sellers are all out, NFLX will resume it's upward trend. Look forward to adding it to my daily trader list.