I think it is important to review previous trades, especially when they go bad. I had my first losing trade of 2021 last week – so what mistakes were made?
- I did not follow my process – Ionis Pharmaceuticals Inc (IONS) did not meet any of the full criteria outlined in my Z Option stock screens.
- Since I did not follow my process – I did not have enough conviction in the stock when it started to go south.
- Emotions took over – I certainly did not make this trade at the top, but I probably did sell at the bottom.
- I have a firm rule not to trade in High Momentum Stocks – why would I be trading a Biotech with no profits and no dividend?
- Ionis Pharmaceuticals will post earnings in August 2021, well before my Puts expired – yet I did not research previous earnings or anything about the company beyond a high-level Morningstar review.
- Stock was already down 37% for the year – if I wanted to trade the stock, I should have been waiting for a bottom / level of strength before I initiated the trade.
This was really a sloppy trade – not surprising l lost money.
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