Return to Trading
Back in December last year I realized I had way too much on my plate to handle. I was renovating a house, planning a wedding, moving, preparing for Christmas, and trying to trade all at once. It was all too much for me to handle at one time and it was starting to show in my trading. Not only in the p/l but also the way I felt about it. I didnt have that same fire I usually had about everyday preparation and review I had the months earlier. So I stopped for a while. I didnt know when I was going to be able to come back, I didnt have a timeline for anything that was going on on when the house would be done, when we would move in and if we would have enough money to pay for the wedding. Way too much uncertainty in my life, how could I possibly be certain in my trading.
It was tough to put it aside, and its made me realize a few things
1. Trading is a privilege.
Anyone can open a brokerage account with a hundred dollars, but trading the way you want is where the majority miss out. 25k is an obvious barrier. Scanners can make a world of difference if they are the cause of a large chunk of your profits. Order flow programs giving more insight to the current market. There are so many expensive yet essential (to me) tools out there that the regular retail trade simply has no access to without a decent available chunk of change to spend on. Monthly. Not having 25k to trade forced me to try swing trading.
2. Swing trading makes you a better day trader.
Since I couldnt day trade anymore, I tried swing trading. I cant be at my desk and focus on day trading, but I can swing trade still with what money I have left. I would do my usual charting, morning or evening and find some setups that looked good for a swing trade. If I saw it as a day trade intraday on the 1min id take it, so I just switched 1min to D and took the trade.
Its been a game changer for the way I daytrade now. I understand more what they mean by long term and short term traders. Where is price and where did we come from, what does that mean for each style of trader. It made me understand more what volume early in the morning is and what that means for later in the day. It helped me understand big money buyers or sellers, where they are and what they look like. It helped me understand what causes those big multi point moves in names that seem to come from nowhere.
Overall it has changed the way I look for day trading setups now. I clearly know within seconds of looking at a D chart, if I want to look for a day trade there. Context is the key word here.
3. Options can be a great way to make some good swing trades, and really limit risk
I dont like the idea of taking 10 shares on some hot pharma stock that moves 20 points a day knowing that it can gap wherever and I could be down 200$ over night even though im trading so small. What is the solution here. Options. I decided I finally have a use for options. Originally experimented with options and day trading, found nothing I liked there. Then tried them with swing trading and im settling that it is the best way for me to swing trade. No matter what, the max I can lose is what I pay for the premium. It has turned into 'how well can I turn 50$ into more money.'
4. You can trade better when there's less clutter in your life.
Less clutter in your life = less clutter in your brain = less clutter in your trading. When the house/move was all done and over with there was this massive release of stress that I could feel is gone. It was like a third of my life was free all of the sudden. I knew I was one step closer to coming back to trading. Now that its late March I can tell you, there is so much power in being able to focus solely on trading. All that head space cleared up to focus on one thing and one thing only.
5. Commission free trading is the way to go no matter what.
I moved from Lightspeed to Tradestation and couldnt be happier about it. Last year I made about 3.5k from trading, but spent nearly 6k in commissions the whole year. To me I took that as, I can make money, but commissions are what hold me back the most, so it only makes sense to find a new broker that doesnt charge commission. I was worried about a lot of things. How do they handle money transactions, how well do I get filled, Does the platform experiences outages regularly, getting used to the new UI. Lots of concerns but ultimately $$$ makes the difference so I went for it.
Not a negative thing to say. I can trade as much as I want, have a very nice option interface to work with. Fills are fantastic. Have a couple new order flow windows that are very helpful. Ultimately been a very positive experience.
6. Trading is a Job
This market is giving me major headaches after everyday. Its tough. Theres so much opportunity out there I have to sit at my desk from open til close. If I dont take all the trades that my edge is there, the numbers can go against me if i miss those trades that are the big outliers. This is just what needs to be done. These are rare times and if I am making the most out of them now, I need to make sure im making the most out of them in the future weeks as well. There is no time right now for slacking off and being ok walking away early. Not for me.
These are all things all the pros would talk about in podcasts, posts, interviews, videos. But its different to feel and experience. The difference between knowledge and understanding.
Not all good came from this break though. Obviously the virus is causing a major disruption in everyone's life and mine and my fiances is no different. We had to cancel all of our wedding plans and postpone for a later date. It sucks but its also been a blessing in disguise. We are rethinking a whole bunch of original ideas and now that weve gone through so much, we know what we do and dont like, and what we would have changed, we are now changing. So while we have to wait another 8 months instead of less than 2, our wedding is going to be that much closer to everything that we wanted. When the day finally comes its going to be amazing. And another good thing is that we already have so much planned with vendors and dates, that really were going to be sitting doing nothing for several months just waiting for the date to come. No more rushing to get everything figured out.
So now for the return.
Usually when I take a break from trading I felt like it took me as many weeks as I was out, to get back the 'normal' feeling again. Not this time. I felt like I never left. I picked up right where I left off, I had a big yearly review to remind myself. And now that I had been swing trading I knew exactly where I would be getting the most out of the days trades.
First off I expected to be coming back to the normal slow moving bull market. I had completely missed the start of the downturn and came back right in the middle of it. 1st week was a little shaky getting used to everything that was new. Location, platform, setup. 2nd week I was right back in it profitable 4 days. 3rd week I already broke records and goals I had set for myself for the YEAR. 1st 1000$ trade, 1st 1000$ day. Nothing special. Didnt do anything super different. Just took the trades I wanted to and market provided. We are getting some absurd moves out there. My reversal trades are really on fire right now and its obviously due to the volatility. Some names out there are making some crazy over extended moves and im simply looking to take the bounce/rejection. We get too far too fast and volume is the biggest key to look for the deep pullbacks. my 1000$ trade was on a reversal at the end of the day that turned into a massive short squeeze. Stock was killed all day from 28 to 18, no pbs. and At the last 15 minutes of the day ripped from 19 to 24. I was just there at the right time with the right entry. Very big thanks to Trade Ideas for the scanner settings. I expect to get plenty more in this market environment for sometime so I had best make the most of it.
Its not so much me as it is the market causing this. The environment is just providing more opportunities to me than usual. If you have good edge and can have 20 setups a day to exploit that edge, then you will have more than on days you only have 5 setups to exploit that edge.
SPY currently at huge breaking point we will have to see what we can do around here. I imagine things can absolutely get much worse as they always can, but would be nice to see us hold here and get some major reversal. I have not stopped trading options along side my day trades and I bought several calls on different names looking for some reversals in a longer term sense too. If we dump more, its fine, risk is managed and loss is capped.
Going into the 4th week im not setting any expectations for myself except to trade well just like I have the past couple weeks. I broke my own records but I still cant retire so I still have to keep clicking buttons. I remember reading a Shadkin post about how when he had a green day, hed get bigger the next day, and bigger the next day. Im 8/10 green days in last two weeks and had a red day last friday. This week Im going to do this. Normal 50$ risk on monday, if I do well then 75$ on tuedsay, 100 on wed etc.
Its a whole lot of fun being back again but im am BURNED at the end of each day. Its a job and I still love it.
It was tough to put it aside, and its made me realize a few things
1. Trading is a privilege.
Anyone can open a brokerage account with a hundred dollars, but trading the way you want is where the majority miss out. 25k is an obvious barrier. Scanners can make a world of difference if they are the cause of a large chunk of your profits. Order flow programs giving more insight to the current market. There are so many expensive yet essential (to me) tools out there that the regular retail trade simply has no access to without a decent available chunk of change to spend on. Monthly. Not having 25k to trade forced me to try swing trading.
2. Swing trading makes you a better day trader.
Since I couldnt day trade anymore, I tried swing trading. I cant be at my desk and focus on day trading, but I can swing trade still with what money I have left. I would do my usual charting, morning or evening and find some setups that looked good for a swing trade. If I saw it as a day trade intraday on the 1min id take it, so I just switched 1min to D and took the trade.
Its been a game changer for the way I daytrade now. I understand more what they mean by long term and short term traders. Where is price and where did we come from, what does that mean for each style of trader. It made me understand more what volume early in the morning is and what that means for later in the day. It helped me understand big money buyers or sellers, where they are and what they look like. It helped me understand what causes those big multi point moves in names that seem to come from nowhere.
Overall it has changed the way I look for day trading setups now. I clearly know within seconds of looking at a D chart, if I want to look for a day trade there. Context is the key word here.
3. Options can be a great way to make some good swing trades, and really limit risk
I dont like the idea of taking 10 shares on some hot pharma stock that moves 20 points a day knowing that it can gap wherever and I could be down 200$ over night even though im trading so small. What is the solution here. Options. I decided I finally have a use for options. Originally experimented with options and day trading, found nothing I liked there. Then tried them with swing trading and im settling that it is the best way for me to swing trade. No matter what, the max I can lose is what I pay for the premium. It has turned into 'how well can I turn 50$ into more money.'
4. You can trade better when there's less clutter in your life.
Less clutter in your life = less clutter in your brain = less clutter in your trading. When the house/move was all done and over with there was this massive release of stress that I could feel is gone. It was like a third of my life was free all of the sudden. I knew I was one step closer to coming back to trading. Now that its late March I can tell you, there is so much power in being able to focus solely on trading. All that head space cleared up to focus on one thing and one thing only.
5. Commission free trading is the way to go no matter what.
I moved from Lightspeed to Tradestation and couldnt be happier about it. Last year I made about 3.5k from trading, but spent nearly 6k in commissions the whole year. To me I took that as, I can make money, but commissions are what hold me back the most, so it only makes sense to find a new broker that doesnt charge commission. I was worried about a lot of things. How do they handle money transactions, how well do I get filled, Does the platform experiences outages regularly, getting used to the new UI. Lots of concerns but ultimately $$$ makes the difference so I went for it.
Not a negative thing to say. I can trade as much as I want, have a very nice option interface to work with. Fills are fantastic. Have a couple new order flow windows that are very helpful. Ultimately been a very positive experience.
6. Trading is a Job
This market is giving me major headaches after everyday. Its tough. Theres so much opportunity out there I have to sit at my desk from open til close. If I dont take all the trades that my edge is there, the numbers can go against me if i miss those trades that are the big outliers. This is just what needs to be done. These are rare times and if I am making the most out of them now, I need to make sure im making the most out of them in the future weeks as well. There is no time right now for slacking off and being ok walking away early. Not for me.
These are all things all the pros would talk about in podcasts, posts, interviews, videos. But its different to feel and experience. The difference between knowledge and understanding.
Not all good came from this break though. Obviously the virus is causing a major disruption in everyone's life and mine and my fiances is no different. We had to cancel all of our wedding plans and postpone for a later date. It sucks but its also been a blessing in disguise. We are rethinking a whole bunch of original ideas and now that weve gone through so much, we know what we do and dont like, and what we would have changed, we are now changing. So while we have to wait another 8 months instead of less than 2, our wedding is going to be that much closer to everything that we wanted. When the day finally comes its going to be amazing. And another good thing is that we already have so much planned with vendors and dates, that really were going to be sitting doing nothing for several months just waiting for the date to come. No more rushing to get everything figured out.
So now for the return.
Usually when I take a break from trading I felt like it took me as many weeks as I was out, to get back the 'normal' feeling again. Not this time. I felt like I never left. I picked up right where I left off, I had a big yearly review to remind myself. And now that I had been swing trading I knew exactly where I would be getting the most out of the days trades.
First off I expected to be coming back to the normal slow moving bull market. I had completely missed the start of the downturn and came back right in the middle of it. 1st week was a little shaky getting used to everything that was new. Location, platform, setup. 2nd week I was right back in it profitable 4 days. 3rd week I already broke records and goals I had set for myself for the YEAR. 1st 1000$ trade, 1st 1000$ day. Nothing special. Didnt do anything super different. Just took the trades I wanted to and market provided. We are getting some absurd moves out there. My reversal trades are really on fire right now and its obviously due to the volatility. Some names out there are making some crazy over extended moves and im simply looking to take the bounce/rejection. We get too far too fast and volume is the biggest key to look for the deep pullbacks. my 1000$ trade was on a reversal at the end of the day that turned into a massive short squeeze. Stock was killed all day from 28 to 18, no pbs. and At the last 15 minutes of the day ripped from 19 to 24. I was just there at the right time with the right entry. Very big thanks to Trade Ideas for the scanner settings. I expect to get plenty more in this market environment for sometime so I had best make the most of it.
Its not so much me as it is the market causing this. The environment is just providing more opportunities to me than usual. If you have good edge and can have 20 setups a day to exploit that edge, then you will have more than on days you only have 5 setups to exploit that edge.
SPY currently at huge breaking point we will have to see what we can do around here. I imagine things can absolutely get much worse as they always can, but would be nice to see us hold here and get some major reversal. I have not stopped trading options along side my day trades and I bought several calls on different names looking for some reversals in a longer term sense too. If we dump more, its fine, risk is managed and loss is capped.
Going into the 4th week im not setting any expectations for myself except to trade well just like I have the past couple weeks. I broke my own records but I still cant retire so I still have to keep clicking buttons. I remember reading a Shadkin post about how when he had a green day, hed get bigger the next day, and bigger the next day. Im 8/10 green days in last two weeks and had a red day last friday. This week Im going to do this. Normal 50$ risk on monday, if I do well then 75$ on tuedsay, 100 on wed etc.
Its a whole lot of fun being back again but im am BURNED at the end of each day. Its a job and I still love it.
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