Introduction
On December 4, 2023, I spotted RCL riding the high waves of the stock market, signaling a breakout that was too good to pass up. In this blog post, I share my journey with this trade, from the moment I decided to dive in to the insights I gathered as things unfolded.
I’ll walk you through my thought process, the strategy behind my decision, and the lessons I learned from the outcomes. Join me as I reflect on the ups and downs of this trading adventure, aiming to navigate future market waves with even more finesse.
Trade Overview
- Date of Entry: December 4, 2023
- Underlying Price: $113.87
- Stop Loss: $102.15
- Profit Target: $147.31
- Market Outlook: Confirmed uptrend
- RS Rating: 96
- Position Risk: 10.20%
- Position Size: 5.17%
Decision to Enter
I decided to dive into RCL, drawn by its impressive strength and its breakout from a base in an uptrend. The RS rating of 96 was particularly appealing, signaling strong performance against the market. Despite some reservations about the buy being less than ideal—given the extended price and less than stellar volume—I couldn’t ignore the stock’s price tripling from its first base’s low and the upward edging of the cup handle.
Feeling confident about RCL’s potential, I took a position larger than usual. This decision stemmed from my belief in the trade’s strength and the market’s confirmed uptrend. My optimism about the trade’s prospects encouraged me to bet a bit more on its success, despite the risks associated with the stock’s extended price and the lukewarm trading volume.
Trade Outcome
- Closing Date: January 3, 2024
- Closing Price: $116.91
- Market Outlook: Still an uptrend
- RS Rating: Unchanged at 96
- Outcome Remarks: Despite a sharp decline, the uptrend was confirmed.
- Position ROI: 0.91%
- Portfolio Impact: 0.05%
- Open Duration: 20 trading days, 30 calendar days
What Went Well
- I closed the position on a sharp price decline.
- The initial buy was timed with the breakout, aligning with the uptrend’s momentum.
Areas for Improvement
A key oversight was not selling earlier when the stock dipped below the EMA 21 for the second day, indicating a potential downward trend.
When I bought the stock, the price was extended. If I had bought a day earlier, for example, there would have been a profit. I know, I have ‘woulds’ and ‘shoulds’ in my writings but this is the best I know how to learn.
Lessons Learned
Looking back at my time trading RCL, I’ve noticed I keep running into two main issues that I need to work on:
Getting Better at Setting Alerts
One big lesson for me has been seeing just how important it is to set alerts for when it might be a good time to buy the stock again. By not doing this, I’ve missed out on some good chances to jump back in and possibly make a profit. I need to stay on top of things more and make sure I’m ready to move quickly when the opportunity arises.
That being said, even if I bought the stock back, I would have been stopped out or sold this stock again for now because the price is volatile. Perhaps one of the reasons is that the stock has been in an uptrend for a long time and institutions are realising their profits.
Improving My Selling Timing
The other area I need to improve is knowing when to sell. Waiting even just a day too long to sell a stock that’s going down can affect the outcome of my trade. This has taught me that being decisive and acting fast is super important. I plan to pay more attention to the market’s hints and be quicker to make a move, hoping this will help me do better in future trades.
Tools to consider using here are also using a price alert or tightening the stop-loss. Declining stock = declining account value.
Final Thoughts
Reflecting on this RCL trade reveals the nuanced dance between strategy and timing in the stock market’s rhythm. The key errors—neglecting alerts and late selling—serve as reminders of the disciplined trading demands. As traders, our journey is as much about the lessons we learn as the profits we seek. Continuous improvement and adherence to disciplined strategies pave the path to success in the unpredictable waves of the market.
