Trade The Journey

Trade The Journey

Chasing Profits!

I hope everyone is safe and doing well although places are reopening across the country. Everyone is eager to resume their regular lives after a year of lockdown measures that ranged from complete to partial closures.

The last time I checked, over thirty percent of the US population was vaccinated. Biden’s goal of vaccinating one-hundred million people was completed last week, which means we are on the right path. Some people are still refusing to take any vaccine on the premise that the vaccine rollout was too quick to be thoroughly tested. One of my family members refusing to take the vaccine will return to middle school next week to resume teaching for the school year in person with students.

Students can return to school if the parents allow their return. I’m not too optimistic about the reopening of America; it feels like it’s too soon. To protect myself, I will be getting the vaccine in the coming weeks.

The stimulus bubble will continue as stimulus checks were deposited over the weekend. Studies show people are saving the checks, but we can also see the effect of free-flowing money on market activity. Reddit forums and social media have become the new trading advisor for the novice trader/investor entering the market for the first time.

Since these stocks are covered well in the media, I see no reason to mention their names here. Most of the stocks that saw heavy buying on their way to their highs have retreated. Some of these stocks have some potential to recover, but most were bottom-of-the-barrel stocks with a serious amount of shorts on one side.

After exiting the most overvalued positions in my trading portfolio, I reentered the market.

Super League Gaming (SLGG) was a company I thought could do well in this environment of video game streaming. The first time I checked the charts, SLGG was trading near the all-time low. SLGG’s first public trade was in 2019, reaching a high of $11.55 on its opening day.

A couple of months ago, I opened a small position in SLGG and closed it for a loss. In March, the stock retreated and then gapped up almost a dollar. It’s been a rocky uptrend with increased volatility on the way up. I didn’t think the uptrend was sustainable but like I learned paper trading, “How high is high?

Looking at the chart, you can see a wedge pattern developing on the thirty-minute chart. I entered the position the first time as SLGG bounced off a daily support level of $6.12 and closed the position two days later on its morning ascent.

The very next day, the stock continued higher. I thought the stock would sell-off after exiting, but it did not, so I had a choice. I could wait for a major sell-off or buy near the all-time high, assuming that it’s going higher. Fearing I was missing out, I brought it near the daily high and immediately regretted opening the position as SLGG closed back near its opening.

Weary of losing all of my profits, I put in a stop to prevent myself from losing the gains from the first trade. Choosing to watch a new series premiere instead of going to sleep on time prevented me from catching the market opening the next day. I attribute this mistake to over-confidence.

Luckily, the stock rallied toward the all-time high made on the stock’s first open trading day. This two-day trade is my best trading day so far. Looking back, I made two trades instead of one.

More information isn’t always better. Sometimes too much information can act as a roadblock to making simple and effective decisions. Trading is all about decisions.

While looking at the positions, I recall thinking of so many antidotes, quotes, and passages to help me decide. So and So said this, or this article suggested I do something else.

I also struggled to compile a complete picture of the trend. You would think that a stock nearing its all-time high would pull back, but SLGG hasn’t done so; it just kept going higher. I should have known that the price will try and test the most visible points, i.e. its all-time high.

Both positions resulted in a small profit.

Trade Score: 2 out 5

Past Week in Review:

Managing your finances is a balancing act between wants and needs. Be careful of “wants” masquerading as “needs”. Netflix is one example for me. I watch Netflix often, so therefore the ends justify the means. I “need” some form of entertainment. I can’t be expected to sacrifice everything in hopes of saving a little money. A small amount of money adds up.

To be clear, no one is saying that you must assume the lifestyle of a monk in order to save money. However, when the tough times hit, the small amount of money saved over a period of time can be a lifesaver.

For the past week, I’d give myself a “C” for continuous improvement.

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