What’s up, everybody? Bryce here.
With 2022 off to a nice start, I thought it would be a good time to go over some recent trades.
As it usually goes with trading, some of these setups were better than others. I think I did some things correctly, while other aspects of my trading could’ve been better.
Let’s go over the good, the bad, and the ugly parts of my recent strategies to see if there are any valuable lessons we can pull out of them…
Biofrontera Inc. (NASDAQ: BFRI)
I’m not gonna lie, I got tilted trading BFRI last week. In other words, I let my emotions cloud my judgment.
CAUTION: Don’t be like me. NEVER let your emotions take control of your overall strategy.
I’d been waiting for BFRI to break out for weeks. The chart had been consistently grinding up and consolidating between $6 and $8.50.
On December 20, BFRI had some solid buying into the close. I went long with a small starter position of $1,000.
On December 21, I FINALLY saw the early-morning gap up I’d been looking for in the chart. The volume and price action were screaming at me: “Today is the day, Bryce!”
I added another 5,000 shares at $10.08. And almost immediately after, the chart started dipping.
At that point, I felt the risk was too wide. I sold most of my shares on the dip.
Of course, as soon as I sold my shares, the chart turned around. BFRI went on an insane run only a few minutes later, reaching a high of $14.65.
So what went wrong for me in this trade? How did I allow my big-picture strategy to be blurred by momentary price action?
I was in a really weird state of mind that day. I wasn’t afraid of losing $3,000 — I was sensitive to losing at all.
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In other words, I wasn’t trading with my normal confidence because a few recent trades had gone south on me.
The lesson? Don’t make the same mistake I did on BFRI. If a setup is excellent, trade it aggressively. Keep your head up — and always keep track of your trading confidence.
Adagio Therapeutics Inc. (NASDAQ: ADGI)
Later that same day, I attempted to trade another setup I liked with little success — ADGI.
After coming off its highs by roughly 50% — from $17 to $9 — I was hoping to see a nice first green day on ADGI.
But unfortunately, the chart chopped around in a range all day on December 21. I tried to trade it three or four different times, but each was the same…
I would buy ADGI shares, it would immediately dump, then I’d sell. Rinse and repeat — the definition of a chopfest.
It was tough, to say the least. ADGI never moved like I wanted it to. I had no choice but to take several losses in a row.
They weren’t big losses, but they still hurt. Every time I thought my ADGI trade was about to turn around, a demoralizing dump would bring me back near my cost basis.
The lesson? There’s no guaranteed way to time a first green day.
Remember: Even after stocks get taken off their highs by 50%, it can sometimes take days (or weeks) for the chart to truly resume its uptrend.
My advice? Wait for confirmation of a first green day before going long on beaten-down stocks.
Conclusion
Am I bummed about these subpar trades? Yes. Will I let similar concerns cloud my judgment in the future? Absolutely not.
Instead, I’m taking my advice to heart. Every missed opportunity offers a crucial lesson.
Remember this: your simple mistakes can pay you back with lifelong trading knowledge. And that’s considerably more valuable than the money from any single trade.