Why Cutting Losses Is Important - Daily Trade Recap: 1 Win & 2 Losses

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- Today I’ll be reviewing the importance of cutting your losses quickly when day trading. Today I took 2 losses and 1 win, and I ended up having an overall profitable day because I stuck to my rules.

The first trade was MDGS. The reason why it got my attention is that it didn’t hold any of its spikes the day before, so I wanted to short it today. I’d set my risk at $1.77 as that was the latest failed spike.

As the market opened, it started at $1.48, went up to $1.58 and then crashed to $1.43. I took a position at $1.54-$1.55. But I set risk at $1.58 (despite higher original risk) and I took a loss of 10 cents a share at the first new spike.

I re-shorted it as soon as it went up again (got in at $1.65), I was risking $1.77 this time. I went in with a half, planning to add more on another spike, but the price went straight down. I covered a quarter at $1.50, another quarter at $1.43, and the rest at $1.43 as it held there for a while.

I took a loss at first, but I was able to recover with the second trade. This is the lesson here: if you follow your risk/reward plan, your single win of the day will wipe out more than 1 loss, and you will still be profitable.

Check out the video to see my 3rd trade of the day, DFBG, which resulted in a loss. I’ll explain why it was an interesting setup to trade and how you should approach a tock that is 200%-500% up.

00:48 MDGS trade recap
04:18 DFBG trade recap
06:53 First green day setup analysis
07:41 PED - a similar setup
09:15 Cutting losses quickly will help you stay profitable despite taking losses
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Видео Why Cutting Losses Is Important - Daily Trade Recap: 1 Win & 2 Losses канала B The Trader