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Trading 101: Breaking the losing streak

|Includes:Compañía de Minas Buenaventura S.A.A. (BVN), COH, HD, PBR, V

HedgeFundLive.com  
-- Lately my blogs have been about my plans and my dismal trading. I am happy to report that, as of yesterday, I broke the streak and gained some confidence in my trading ability. Over the weekend,  I went back to the drawing board and created a plan to get me back on the right track. My plan was simple. I was to keep my size small, add into the winning trades, keep tight stops, and buy strength and short weakness. My expectations for Monday was to have a positive day and more importantly be satisfied with my trading. For the day my P&L was up $10, but I was satisfied. I fought back from being down $60 and stuck to my trading plan. Sometimes it’s not about the dollar size you break the streak with, but the satisfaction within yourself and your trading. Today I came in with the same plan and a goal of making $150. My day started off strong, I was shorting weakness and buying strength. I was short BVN, PBR, and BTU and long COH, V, and HD. Near my P&L highs I was up as much as $277. Once I was there, I set a give back. My P&L was not to get lower than $160. That is where my P&L ended for the day. The great thing about breaking a streak is really the confidence it brings to your trading. Let’s face it- there is no better feeling than being right and making money. In a business that is filled with highs and lows, the key is to keep the lows to a minimum. When you are on a bad streak, it is important to keep yourself trading in tight risk parameters. You do not want to have your losing days outsize your winning days. Also do not forget to take notes on your trading as they will be helpful throughout your trading career. For the next couple of days, I am going to keep tight risk parameters on my trading. Although I like how I traded the past few days, the market can take your lunch at any time if your not careful. With earning season upon us again, I will remain cautious in trading to the long side and remain to buy strength and short weakness.

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Stocks: BVN, COH, HD, PBR, V