I haven’t been updating my progress on The Brandon Portfolio for about a week because I reached a breaking point last week.
After making several technically sound buys the first 2 days last week and seeing small losses, I nearly gave up completely.
I remembered again what I’ve always known in the back of my mind.
The rules are stacked against everyday people who are just trying to make some money. The rich, the hedge fund managers, and the corporate insiders are the ones making all the real money and occasionally they let a few crumbs fall down to people like me just to keep us in the game.
Take the PDT rule for instance. I have gotten pretty good at recognizing when a stock is going to surge in price and when to get out of it to save my profits. But I don’t have $25,000 in my trading account.
That means I am not allowed to make money on active, surging stocks every time I see them.
Because of the PDT rule, I can only take advantage of 3 skyrocketing stock prices in 1 week.
Meanwhile, someone with $25,000 in their trading account can jump in and out of that stock as many times as they want (with leverage) collecting very nice to massive profits as many times as they want.
So last week I YOLO’d on a stock and won big. I bought 8 shares of SEV at a price of $38.80. I sold the stock the next pre-market at a price of $50.50. That’s $93.60 profit from one trade.
Then I got burned by the stacked deck.
I had used up my 3 day trades, but I felt confident SEV would continue to hold or even surge a little more. So I got back in with only 2 shares this time at $49.40. That’s when the short sellers showed up. I had to hold this losing position all the way through until the next day and my tiny 2 shares went down to a price of $26.60. That’s a loss of $45.60!
That took my $93.60 big gainer on SEV down to a $48 profit.
Any other trader (with $25,000 or more in their account), could have gotten out of that bad trade any time they wanted. Any one except for the small time trader like me that is.
Everyday, small time traders like me (us) have to sit there and take the beating while the big guys (and gals) rack up more wealth.
To say that isn’t fair is a massive understatement.
The whole thing reminds me of piece of advice I heard years ago.
I made a serious mistake taking a risky trade when I knew I was going to have to sit on it for a whole day. I rolled the dice and I lost.
Not any more.
My new strategy is pretty simple. Going forward I am only doing day trades on surging stocks in The Brandon. That means I will most likely only do 3 trades per week. I am not going to enter any trade (of any kind) that I can’t get out of immediately. So on the days when I don’t have any day trades left out of the 3, I won’t be trading.
I started this strategy this morning during pre-market and it has already made profit for the day.
I saw a nice upward surge happening on ISPC. So I bought 20 shares at $17.70 and rode it for a total of 11 minutes to $18.87 for a profit of $23.40 on the day.
I am out of day trades for today, but I get 2 back starting tomorrow so today I will just continue to watch the hot stocks and continue to learn.
Tomorrow, when I see a good opportunity, I’ll get in again.
For the month, The Brandon is up $82.48 (29.01%) for a total balance of $386.29.