Why cutting losses is soo important! + BONHEAD mistake.

Alright so today was a pretty good lesson for me to remember!

I will analyze 2 trades that I lost on, why I lost, and why it was stupid of me to even trade them.




I was watching VNCE and APIC, both are pretty good earnings winners that are breaking out, my mistake was forgetting to look at their VOLUME!


Ill start off with my first trade of the day, APIC.

I saw APIC gaping up on pre-market and saw that it is an earnings winner.

here's how it looked on the open:



My setup was good, entering at 8.48 and my risk being at yesterdays high at 8.38, I was planning on a breakout to happen, but the stupid mistake that I made was not looking at the volume which was LOW nearly 12,000k...

This is something I don't use to do, I tend to enter trade that trade with big volume for good volatility! but...I made my mistake and cut ted the loss.

Now, why is it good that I cut ted the loss? because the stock fell 0.48 cents from my buying price. eventually it bottomed and spiked broke 8.48 and kept going to 8.78 a nice 0.30c gain but I didn't want to trade it because of the loss I had + volume was still too low.



Moving on to my next trade!

VNCE, here's how it looked before my entry:



I didn't see it at the morning when it spiked 0.50 cent, but I got it when I saw it coming down and was hoping to get a good dip.

I bought it at 6.42 with the days low being my stop, the plan was OK overall BUT! I didn't see a few things, first of all, it gaped down to earnings, second! it was making lower lows, these are two things that I always look at before entering the trade, I guess I wasn't in my best today.

cuted the loss and it kept falling 0.40 more cents.





The major lessons that I learned is:


1.Not forgetting to look at major indicators before entering a trade like VOLUME!


over all I lost 0.20 cents today on both trades, this is a SMALLLL loss for 2 trades and I'm proud of my self that I control my cutting losses quickly rule! I just need to be more focused before I enter trades and make sure that it is really THE BEST SETUP that I look for.