The purpose of this site is to introduce basic terms and to help readers understand how fundamental concepts—such as spreads and commissions—can impact day traders in the long run when they submit too many trades within a single day, especially bad ones. Through the exercises in Section 23, 'Exercise: Costly Losses,' readers will learn from these hypothetical scenarios and recognize the patterns. In total, there are 42 different exercises to complete. Below is one of the 42 exercises using the trade journal analyzer.
   

1. A stock that had gapped up huge in pre-market trading.

The position was entered prematurely. The price declined immediately following the market open, and no protective stop-loss order was in place.

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Initial trading amount = $3000

Commission          = $0

Stock entry price = $2.62

Stock sold price   = $1.82 

Number of shares bought  = 1000 shares

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The outcome is a drop of 30.53%, and it requires 43.96% to recover to the original bought amount.

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