“Every trader has strengths and weakness. Some are good holders of winners, but may hold their losers a little too long. Others may cut their winners a little short, but are quick to take their losses. As long as you stick to your own style, you get the good and bad in your own approach.”
First, I would like to give a very big thank you to Trader Stewie and the AOT community, for an incredible trading year. I’ve been an active member of the AOT community for almost a year now, and I’ve enjoyed every second of it. Thank you to Stewie and all of the AOT members for all of the day to day interactions and encouragements. We should all be very proud of being part of such an incredible service and community. I’ve seen newer members make great strides 2018 in their trading journey. If you’ve came out on top this year that is a very big achievement in itself. Be proud of that! 2018 has been a wild year for the markets! Sideways chop, big intra-day ups and down and uncertainty. Take a look at this QQQ daily chart!
This is what we’ve navigated!
That being said, everyone has trading ambitions and goals. As we head into 2019, this is the time to highlight your strengths and weaknesses, and build a set of solid, manageable, and attainable goals for the year ahead. We’re coming into a new year, this could mean a fresh start to some, or a continuation of what you’ve worked very hard to obtain. I always like to take a good hard look at my trading at the end of every month, quarter and year.
This year I’ve broken my trading performance down into two categories. I’ve tried to highlight everything that has held me back, or has potentially cost me money in the year of 2018. You have to be honest with yourself. I’ve organized these weaknesses into two categories. Internal and External factors. I’ve categorized anything under internal factors that might be considered skill sets or something that might take more practice, and time as a trader to develop. Anything under external factors is something that is directly controllable now, and in your power, to change immediately. I’ll list some of the things that I’ll be working on and changing for 2019.
• Always sell gap ups. PERIOD!
• Using mapped out levels on the 5-minute chart, use market limit orders to enter day trades
• No more than 2 day trades a day. 4 failed day trades in a week = STOP.
• Don’t be afraid to use weekly options to mitigate risk when trying to play short term market reversals
• Feeling uneasy or burnt out? Take a break. Clear out all positions
• $1000+ gain in one day. Sell positions. Take the day off.
• Switch to a broker with more flexibility in terms of advanced trading options. (Trailing stops, faster and easier execution of market orders, after hours trading etc….)
• Trade directly from my trading software. (Faster, more control)
• Upgrade my trading arrangement (New desk, Monitor, Chair. Make it feel more professional)
As you can see with these two lists, these are things that I’m going to actively work on, develop and practice throughout 2019. As market conditions change so will the lists to an extent. As for the external factors, these are things I just need to do. Nothing is holding me back, I just need to check these items off the list.
In order to come up with your own lists of internal and external factors for your trading, you need to highlight what you’re good at and really be honest with yourself, as to what you’re not so good at. The reason why it is more important to highlight the negative then the positive for this situation is because you already know what is involved in being “good” at your current strengths. For your weaknesses you’ve probably been more frustrated than constructive in those situations, so highlighting the negatives, and where you need improvement is very important in the development of your trading. Some weaknesses you might have are proper capital management, chart reading, entering / exiting positions to late or to soon. A very common external factor might be following way too many people on twitter. Maybe you don’t have a clear plan at all. These are all things that you have time to look at, plan out and work on now as 2019 approaches.
A very informative and eye-opening post I always like to refer to is "Stages of a Trader" by Bo Yoder. It can be found on Trader Stewie's blog. If you haven’t read it, I encourage you to read it. I can almost guarantee you, you’ll be able to pin point yourself in 1 of the 6 stages. You might ask “well what good is that to me?” I think if you’re able to identify yourself in your current state of trading you’ll be able to make the improvements and adjustments you need to make in order to make it to the next level. I’m sure reading this will help you come up with a very constructive list of weaknesses that you can use the new year to practice and improve on.
Another great resource from Trader Stewie is his “Things I’ve Learned After 15 Years Of Trading” blog post. Reading through this will open up many weaknesses you never thought you had.
Here are some great points that really stick out to me on this list.
• Learn to be patient once in a winning position. Learn to be very impatient when in a losing or questionable position. Lowering a stop loss is the first sign of trouble. You are breaking the rules and emotions are starting to creep in.
• Your 'hardest' work should be done while the market is closed. So that when the market opens, you will be prepared once your setups become active.
• Never ever, get into a position that is "too BIG" for the account size. All it takes is a few bad trades to cripple you beyond repair.
• If you have no solid plan (i.e. Setup, proper entry, stop loss, exit strategy, target), then why are you in the trade?
• Most traders are never "happy" with their trades. Understand that no trade will ever be "PERFECT".
• Over trading is the POISON for your trading. LESS IS MORE!
• You will never buy the exact bottom and you'll never exact sell the exact top: Don't beat yourself up if "you left money on the table"
In conclusion, this will be my last AOT guest post for 2018. Once again, thanks for all the support, encouragement and social interaction through 2018. I hope everyone has a great holiday season with family and friends!