Steven Dux
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Trade Recaps · April 7, 2024 · 5 min read

2024 Trading Journey: How I Made 700k In 3 Months

2024 Trading Journey: How I Made 700k In 3 Months

A LOOK BACK AT THE MARKET OVERVIEW

COMPARISON TO 2023

The trading landscape of 2024 has shown significant improvement compared to the tumultuous markets of 2023. Last year was characterized by numerous low floats, an abundance of biotech stocks, and a series of short squeezes, all of which were considerably manipulated, making trading a challenging endeavor. One of the main issues was the lack of consolidation, which is crucial for strategizing trades.

OPPORTUNITIES IN 2024

This year, however, we're witnessing a resurgence of opportunities reminiscent of 2021. The market feels more conducive to our trading strategies, promising a potentially profitable year ahead.

PROFIT HIGHLIGHTS

Focusing on the performance of my Trade Zero account over the past three months, I've managed to secure approximately $700,000 in profits. Despite facing a slight dip in March, the journey has been remarkably rewarding thus far.

DELVING INTO MAJOR LOSSES

THE AISP TRADE DEBACLE

One of the most significant setbacks occurred with the AISP trade, marking it as my biggest mistake in 2024. My entry into this trade was aggressive, and I found myself trading a staggering volume of 160 million shares, which, in hindsight, was an oversight due to the stock’s low price and high volume.

  • Oversizing Position: I entered the trade with an excessively large position, failing to adjust the size considering the stock's profile.
  • Trading Crowded Low-Priced Stock: The crowded nature of this low-priced stock made it difficult to exit without impacting the market price, which ultimately went against my position.
  • Not Respecting Risk on Consolidation Breakout: The stock experienced a consolidation breakout that I did not respect. Instead of exiting, I continued to trade in the afternoon, hoping for a different outcome.
  • Avoid Crowded Low-Priced Stocks: It’s critical to steer clear of highly crowded, low-priced stocks to avoid liquidity and slippage issues.
  • No Multiple Attempts After Initial Loss: After a significant loss, making multiple attempts without solid conviction is a recipe for disaster.
  • Need Conviction on Trade Pattern: Understanding and having conviction in the trade pattern you're betting on is crucial.
  • Proper Reward:Risk Ratio for Shorts: Always aim for a favorable reward-to-risk ratio, especially when short selling.

    • CELEBRATING MAJOR WINS

    THE CPOP TRADE SUCCESS

    One of the biggest wins came from CPOP, which involved multiple entries and exits leading to a total profit of $200,000.

  • Pre-Market Gap Up Short: This entry was predicated on a typical pre-market gap-up short strategy.
  • Bounce Short from Previous Resistance: The stock's bounce back to the previous day's resistance offered a lucrative short opportunity.
  • Stop Continuation Short: Identifying the continuation pattern allowed for a series of profitable shorts.

    • Understanding the float and volume plays a significant role in the success of shorting stocks like CPOP.

  • Calculating Rotation Based on Volume/Float: Analyzing how the stock's volume rotation compares to its float can reveal insights into its trading behavior.
  • When Low Float Behaves Like High Volume: Occasionally, a low float stock can exhibit high volume trading characteristics, offering unique shorting opportunities.

    • RISK MANAGEMENT REVISITED

    Reflecting on the AISP loss, several crucial risk management principles have been highlighted:

  • Oversizing and Not Following Rules can significantly increase risk exposure.
  • Multiple Attempts After Loss without a clear strategy must be avoided to mitigate further losses.

    • The importance of Discipline and Consistency cannot be overstated in trading. Every loss presents an opportunity to learn and refine one's trading strategy.

    NAVIGATING LOW-PRICED STOCK CHALLENGES

    Low-priced stocks present their own set of challenges, including:

  • Position Sizing Challenges: Ensuring appropriate position sizing is critical to manage risk effectively.
  • Liquidity and Slippage: These factors can significantly impact trade execution and outcomes.
  • Support/Resistance Levels: Understanding these levels is essential for planning entries and exits.

    • When encountering low-priced setups, careful consideration of volume/float rotation and a clear reward-to-risk profile is necessary to avoid pitfalls.

    SHORT SELLING STRATEGIES UNPACKED

    Successful short selling requires a keen understanding of:

  • Ideal Conditions for Shorts: Including the price range, volume profile, and identifying favorable chart patterns.
  • Managing Short Exposure: Emphasizing the need to respect breakouts and adhere to defined risk parameters is essential for maintaining profitability.

    • TOWARDS A REFINED TRADE PLAN

    Reviewing both the wins and losses has illuminated areas for improvement in my trading strategy. Continuous learning and the pursuit of consistency are the cornerstones of successful trading. Recognizing weaknesses and learning from mistakes is pivotal for growth and achieving better trading outcomes.

    In conclusion, the journey from January to March 2024 has been filled with both challenges and triumphs. By taking a comprehensive look at the successes and setbacks, I've gleaned valuable lessons that will undoubtedly enhance my trading strategy moving forward. Remember, in the world of trading, continuous improvement and resilience are your best allies. Here's to a more successful and insightful trading year ahead!

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