Investing - A reflection at the end of my first 3 months of trading stocks

Oh boy… this was an interesting quarter!

After suffering a few setbacks in my first month trading stocks, things had turned around for me in this period.

I started making some winning trades and my portfolio turned green!

Yay!

Maybe it was down to beginner’s luck?

Or maybe I was a quick learner?

I’m not sure!

All I know is that I had told myself that I was only going to make winning trades and no more losing ones. And for the most part, I did.

At least in terms of real earnings.

My second month trading stocks

I had started my second month in the red. I had already lost $18 and my unrealized earnings were at -$23.

Ouch!

This was NOT how trading/investing was supposed to work!

You are probably wondering, were my earnings going to continue going down, or was my luck going to turn?

Well… my luck turned!

At the end of the first week in my second month trading, I had gained $9 of unrealized earnings back.

Alright!

But I was still in the red.

And then the streak kept continuing. So when the end of the second week came, my unrealized earnings were now in the green!

Awesome! I was at a positive $22.

That meant if I closed all my positions, I would have made a very small profit!

This was beginning to encourage me and I started devoting more time towards finding/picking stocks. As well as keeping tabs on my growing portfolio size.

And the gains kept coming. So I kept buying more and more stocks. Filling up my portfolio.

At the end of the third week, I had almost $42 in unrealized earnings in my account.

This is great!

Things were starting to bounce back for me. It seemed like the stocks I was picking were overall good ones.

So that meant, buy more stocks!

Then came the end of the second month.

BOOM!

I was up to almost $75 in unrealized earnings.

This was going almost too good to be true. I didn’t care and was loving all the gains and green that I was seeing in my account.

Then the last month came.

My third month trading

Oh boy!

Yup, it started off with another oh boy.

My portfolio got absolutely hammered by the end of the first week in my third month trading stocks.

It went back into the red! I had an unrealized loss of over $80 for the week. This had wiped out all my previous gains and then some.

However, I did manage to close 1 profitable trade. So this brought my account from -$18, to +$0.50.

Alright! I was basically at zero again. But my unrealized earnings were back in the red.

And seeing all that red made me put a halt into buying more stocks. I was nervous if the peak had been reached, or if this was just a short dip in the market.

Thankfully, the next week came around and it turned out to be just a short dip. My account regained all the losses from the previous week and I was sitting at unrealized earnings of $75.

Phew!

This was the first time that both my earnings and unrealized earnings were sitting in the green!

At this point in time, I was starting to wonder if trading stocks was such a good idea. I noticed that I was spending a lot of hours looking at charts and if I had just invested in the S&P 500, I would have had a 7% return. Much more than the return that I had in my account.

I remember so many stock traders saying to NOT time the market. Just focus on the long term and invest in the index funds. It’s less stressful and less time consuming.

I was beginning to think that maybe these people were right. I was definitely stressed from the wild swings in my account. Plus trying to buy stocks at a good entry point was also very time consuming.

Add the fact that I wasn’t really seeing a benefit in this strategy (I was actually doing more work and getting a smaller return), so I really had to think if this was what I still wanted to do.

While I let those thoughts sit with me, I decided to keep going and trying. I figured it would take me some time to get good at this and figure out a solid strategy.

This decision at first seemed like a great idea.

At the end of the second week, my unrealized earnings were just above $155! Seemed like my return percentage was getting better and better by the day.

That is until the third week came around…

The week started off strong and my unrealized earnings were almost at $200 and then some massive red days.

By the end of the week, my unrealized earnings were sitting at just $30.

Another big ouch!

I did manage to close 1 winning trade though, so my true earnings were now up to a bit under $13.

And then the red days just continued into the last week of my third month trading stocks.

Except this was my biggest weekly loss thus far.

My unrealized earnings sank to -$265! It was almost a $300 swing in the negative direction!

I did manage to close a couple profitable trades before those stocks also tanked, so at least my true earnings went up to $35.

But it wasn’t much comfort and it sure as heck didn’t make me feel any better.

I was pretty disappointed, saddened and disheartened by how the last 1.5 weeks ended up going for this quarter.

And to add insult to injury… all those “invest in index funds because you won’t beat the market” turned out to be very true!

It was a nice punch in the gut to end this quarter!

Reflections and lessons learned

Some of the my thoughts and the things that I learned in this period were:

• Things can change very suddenly and quickly in the stock markets. Most likely it is going to be in the opposite direction that you want things to go.

• If it were easy, everyone would have a career as a stock trader.

• It is difficult to know when to exit. And it is just as difficult to predict which direction the stock market is going to go next.

• Pulling the trigger and buying stocks in periods of up/down swings is difficult to do.

• If you can’t beat the market’s return (S&P 500), then maybe you aren’t cut out for trading stocks.

• The bigger the losses and the more red that I saw in my account, the less interested I was in trading stocks.

• Trading stocks can take a mental toll on you in times of high volatility, or during rough periods.

Overall, I’m still going to continue trading, but likely I’ll take more of a backseat. I’ll see how long the dip lasts for and just pay attention to the direction that stocks are moving.

I’m very much a newbie to trading and I can’t expect to be making profitable trades every time.

Do I expect more from myself? Or do I expect to have positive returns?

Yes! Absolutely!

However, this is a learning phase for me and I need to accept my mistakes and losses. I might be discouraged, but I’m definitely not out of the game.

On to the next quarter!

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If you want to keep reading about my stock trading journey, then definitely have a read of my progress, thoughts and reflections after 6 months of trading stocks post.