I am not going to post charts tonight again, as frankly, I am disgusted with my performance today. Today was not a great day for me. Not only was I chopped to pieces trying to trade WAG and CCL in the morning I also ignored what made my day successful yesterday. I was not able to carry my mentality of slow and steady from yesterday into today, as one good day made me overconfident and I fell back into overtrading.
However, there is something positive to take away from this session in that I have identified the things which cause problems with my trading.
1) Overtrading – I am prone to this. I need to actively remind myself not to do it (I will stick a note on my desk tomorrow as a visual reminder). What is worse is that if I do take some early losses I am much more prone to overtrade. This is, unfortunately, like trying to put out a fire with oil.
2) I don’t trade the big picture – I am looking for 10-30 cent moves. Now inherently there is nothing wrong with this, but if I am to overcome my overtrading I need to focus on finding a trending symbol, getting a good price, and letting my trade run. This will also help me preserve emotional capital.
3) Trade management – A weakness in my trade management is differentiating between a normal pullback to a higher low and the beginning of a larger reversal. This has been problematic for me because I will either end up giving back more than I’d like or selling out to early. However, I am especially fortunate here as there is an easy solution – review more videos of trades, study the level 2’s and try to identify the key characteristics that distinguish the two.
4) Information overload – I have gotten better at putting on the blinders, so to speak, when trading. The problem for me is that if I look at too much information, I will miss the details that I really need to pick up on. For example, silver miners may correlate to silver, but intraday, I do not need to watch the silver futures to trade a miner.
5) Emotional management – I need to get better at viewing the trades objectively and not allowing emotions or biases to get in the way of the information and how I process it. Sometimes I find myself caught in the heat of the moment, cheering for a stock to break a refresher… etc. While enthusiasm is great, and nothing is really wrong with this situation – provided I am able to objectively assess the strength of the refresher instead of just waiting for it to break. I think it is a symptom of something that could potentially be a much larger obstacle.
6) More attention to detail – It seems cliche to say this, because ultimately we can always improve a skill, I am not happy with the level of detail I pick up on in trades. Things which I will now take note of in my journal are:
a) Refreshers – where, bid/offer, how strong (duration/approximate volume), how violent are moves off/through refreshers
b) Levels – support, resistance, inflection points, yesterdays high/low/open/close.
c) How do I feel about trades – wins/losses
d) Confidence scale – I will rank all my trades from 1-10 prior to exiting them, and then see if what I thought were my ‘A’ trades were. This will take some time, but hopefully I will gather some meaningful data.
e) What kind of setup is it – refresher, level, inflection point, technical setup… etc. By recording this I hope to see if any sort of trend emerges where one type of trade is more successful for me than any other.