introduction
In December 2023, I embarked on a trade with CVLT, expecting profits but gaining invaluable lessons instead. This trading journey, stretching from entry to exit, turned into a profound learning experience.
The trade underscored the critical importance of timing, attentiveness, and humility in the world of stock trading. Each step along the way, from buying to selling, enriched my understanding of the market’s complexities.
Key Trade Details
- Underlying: CVLT
- Buy Date: 15 Dec 2023
- Buy Price: $78.05
- Sell Date: 3 Jan 2024
- Sell Price: $76.41
- Stop Loss: $72.91
- Profit Target: $96.03
- Market Outlook at Entry: Confirmed uptrend
- RS Rating at Entry: 85
- Market Outlook at Exit: Confirmed uptrend
- RS Rating at Exit: 79
The Decision to Enter
My investment in CVLT was motivated by its breakout from a stable base and its position in a confirmed uptrend, signaling a strong potential for growth. However, upon reflection, entering the trade a day earlier could have capitalized more on its upward movement.
This experience highlights the crucial role of timing in trading. A slight adjustment in entry timing might have significantly improved the outcome. Trading is a continuous learning process, where each decision refines our strategy and understanding of market dynamics. The CVLT trade, while not fully optimized, offered valuable lessons on the importance of precise timing and adaptability in the stock market.
The Exit and Its Implications
The exit from CVLT, dictated by a drop in price and a slight dip in its RS Rating, was marred by a procedural hiccup:
- Planned Sale: Accidentally sold only part of the position on the intended day, with the rest following a day later, affecting the average exit price.
Key Takeaways from the CVLT Trade
- Timely Actions Matter: The significance of acting swiftly, both when entering and exiting a trade, cannot be overstated.
- The Importance of Alerts: Setting and respecting price alerts for both stop loss and re-entry points is crucial.
- Market Humility: Recognizing that even well-analyzed stocks can defy expectations teaches humility and respect for market dynamics.
This trade, while not profitable, offered invaluable insights:
- Missed Opportunities: Not re-entering the trade when conditions were favorable was a missed chance for recovery.
- The Market’s Unpredictability: CVLT’s subsequent rise after my exit highlighted the unpredictability and rapid movements of stocks from solid bases.
In the chart graph above:
- Up arrow – buying place.
- Down arrow – selling place.
- Callout – the place where I should have bought the stock back.
Reflections and Lessons Learned
The CVLT trade, though concluding with a -3.70% ROE and a minimal -0.26% impact on the portfolio, spanned 19 days of intense learning:
- Market Timing: Identifying the right moment to buy and sell is as crucial as the investment decision itself.
- Alerts as a Strategy: Utilizing price alerts effectively can significantly enhance decision-making.
- Adaptability and Humility: Adapting to market changes and maintaining humility in decision-making processes are key to navigating the complexities of stock trading.
Through this journey, the CVLT trade reinforced the critical aspects of stock trading – timing, attentiveness to market signals, and the humility to learn from every trade.
As this blog reveals, my trading often involves closing positions at breakeven price levels, occasionally with a slight profit or a minor loss. These actions are part of the daily grind. While we’re all in pursuit of the elusive home run, such moments are rare. Adopting this cautious approach helps in avoiding bankruptcy.”
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