2/16/23 Energy Market Trading Journal - Loss of 48 dollars

2/16/23 Energy Market Trading Journal - Loss of 48 dollars

Today was another day where I got my prediction of what Natural Gas would do wrong.

I started the day off at 8:07am by selling my 100 shares of SCO after noticing WTI Crude going up. I purchased 100 shares at 24.04 yesterday, and sold today at 23.83, taking a loss of about $20. 

If I had held onto my SCO stocks, they would have gone up 2% today and I would have made a couple hundred.

BOIL Loss as Natural gas Fell Today

After taking a 20 dollar loss on my SCO trade, I noticed that HH Natural Gas appeared to have hit a previous support. I assumed it would bounce backup, and I purchased into BOIL with 200 shares at a cost of 1,154 dollars when Nat Gas was around 2.5 dollars / mBTU. Instead, natural gas continued to crash to 2.37 before recovering to around 2.4 by the end of the day.

Due to PDT trade limits, I cannot do anymore same-day trades until tomorrow. For this reason, instead of selling my 200 shares of BOIL, I instead chose to purchase 31 shares of KOLD at 1pm with a total value of $1,975 with the intention of stopping the bleeding of BOIL. I am still holding my 31 shares of KOLD and it has gone up $27 dollars in the last 2.5 hours. BOIL, on the other hand, is down $58 dollars on the day.

Conclusion of today's trading and Lessons learned

All in all, with the 3 combines trades (SCO, BOIL, KOLD) my balance on the day is -$47 dollars. I am not too upset with this since I am happy to take a 50 dollar loss on days my predictions are incorrect so long as I am able to surpass $50 on winning days. 

So far, none of the trades I've done have given me much confidence in my own trading ability, but the last few days seem to be lessons that I need to learn from. Those lessons include not betting so much that I get a forced Margin call, and not trying to hold falling knives waiting for a bounce. They also include not trying to predict the bottom for BOIL.

Complaint about PDT Flag

The PDT Flag made me lose money today. I would have sold BOIL earlier and cut my losses, but had I done that, my account would have received a 90 day PDT flag restriction. Today I essentially chose to eat a 30 dollar BOIL loss so that I would not get PDT Flagged. This makes me wonder how many other amature traders are forced to take a loss due to these PDT rules. This rule seems to benefit Wall-Street traders and harm retail traders.

Trading Plans for tomorrow

Tomorrow, I will have the option to sell off either my KOLD or my BOIL. Natural Gas is really flat right now, and I am unable to predict if it will bounce backup, or continue falling. If I had to make a guess, I would assume that consolidation will continue the rest of the week. Hopefully by the end, we have a good idea where the trend is going.

Tomorrow I will predict that KOLD is going to continue to do well. Under that assumption, I will hold both BOIL and KOLD until about 10:00am to confirm that KOLD is making profits. At that point, I will sell my BOIL and hopefully end the day up.

I expect these coin-flip trades will continue the rest of this week and into next week as the market decides if we are at a bottom or not.

The true money-maker will, I hope, be when the uptrend begins and I am able to hold BOIL for several weeks in a row.