ALGN Trade on Jul 23, 2020 09:35 from CapitalMastery: Tradervue User Stock Trades.

Summary

Took a pretty big hit on this trade today, and was somewhat surprised by the size of this loss given I was only 1 lot over my max size for this stock, but in looking back over the trade, it's clear to see I shorted at the absolute bottom, before it went over an ATR to the upside lol. Had I been on the right side though, this would have been a really nice winner.

Overall, I executed the trade to plan, but it just didn't work out. I went to max size because I got what I considered a beautiful entry signal.

Did Right

• Had a bias an plan going into the trade
• Waited for an entry signal, and when things lined up perfectly in my eyes, I took the short, and went to max size given I should be max size when the entry signal lines up.
• Stopped out at high of day as per my entry strategy

Did Wrong

• Should have actually read the earnings report so I could have a good understanding of how investors were viewing this stock. The daily chart is pretty bullish, and it's extended for a reason, so I should have looked to understand why.
• I was one lot too big, which I shouldn't have done. Max size is 5 lots, and this guidelines is in place for a reason; it keeps my losses proportional.
• After my trading day was over, I did admittingly have an emotional relapse, and tried to revenge trade ALGN a couple times; fortunately I've patched the loophole in my E-Trade risk manager and so wasn't able to do too much damage, but I did take an additional $300 in losses for no good reason, and outside of my daily loss limits.

Improvements

• Consider keeping my max size at 3 lots while I'm still learning my trading strategy/system; at least until I get comfortable with it. I can always crank it up once I've gotten better at it.
• When I take a loss like this, and get stopped out for the day to boot, I should immediately go for a quick walk around the block before doing anything else. This will help prevent any irrational behavior caused by frustration/anger/despair that I'm still vulnerable too at this stage in my trading development journey.

Next Trade

Given how bullish this stock was, I'd assume more continuation to the upside. I quickly glanced over the earnings report, and from what I could see it was not good; miss on earnings, revenue, and shrinking margins, so there's obviously something I'm missing.