Trading Rewind: Revisiting Q1 2020

With just a handful of days to go in this tumultuous 2020, I’m closing out the year with my highest annual gross profit across my trading accounts of close to $5 million.

And as we wrap up an unprecedented year, both in the market and in the world at large, I thought it would be beneficial to look back on the previous 12 months and inspect just what made 2020 such a remarkable year for day trading as well as what it might spell for 2021.

To accomplish this, I’ll be looking back on the previous quarters to see what went right, and wrong, to get me where I am today.

In hindsight, the first quarter of 2020 set some themes that turned out to be prevalent through the rest of the year. It started out with me taking on a new small account challenge, which itself was a result of the frustrating conclusion of 2019 in which I made a concerted pledge to trade more cautiously and, most importantly, limit my share size.

I ended up finishing the month in the red by about -$100. It was an up-and-down January that closed out fairly dramatically in the broad market with a 100 point drop in the S&P in its final few days.

Despite that rough landing, I felt like working with the limitations of pattern day trading regulations and trading a retirement account through January prepared me for the strong momentum we saw in February. Again, I was keeping my share size in check for the most part by sticking with my IRA account and trading penny stocks, which helped me start February with a string of green days that made up the majority of my profits that month, about $55,000 of a net $66,600.

Unfortunately, the end of the month held a similar drop to January that resulted in my biggest daily loss of the year to that point of -$16,000 while also prompting my longest losing streak of the year. It was also the beginning of the global spread of the COVID-19 virus, a threat the world is still living under 10 months later.

It was a dire time for the world, and it translated to a volatile trading month. I started the month in the red by more than -$20,000, only to eke out a couple thousand in net profit over a series of solid base-hits and one $20,000 winning day.

All told, the first quarter was a meager prelude to the months that followed. Nevertheless, it was an important gauntlet for me personally after a rough end to 2020. It taught me a lot of lessons about patience and trading the market you’re in, lessons that I’m still learning the importance of now at the end of the year.