September Monthly Review / 3rd Quarter Review
SEPTEMBER
Its been a hard month. Its also been a new market. Were no longer moving higher in a straight line. We have now had our deep pull in, above and below the major MAs. Stuck in range bound markets and making falling wedges. The long only market is not here anymore for now.
I have not adapted well. I took a bit more trades this month than I did last month and that is a mistake. Things that you could get away with the last few months, you cannot anymore. Long is not easy unless were having a clear theme and strong market that day. Same on the short side. Everything in between has been killing me. Stuck in the chop, failed breakouts after failed breakouts.
My big problem is that I wait for things to get too bad before I really buckle down and make changes. I have to see a lot of red in order for me to finally convince myself that something needs changing. Part of that is inexperience, part of it is ego. Good mix of both. Doesnt matter though only thing that does is that I do proper review and adjust accordingly.
And I have. Throughout the month I spent some time working on some deeper reviews of myself and my trades.
https://justadaytrader.blogspot.com/2020/09/missingre-entering-trades.html
https://justadaytrader.blogspot.com/2020/09/process-for-improvement.html
https://justadaytrader.blogspot.com/2020/09/recent-winners-and-better-plans-for.html
And its interesting to note, I started this review process by obsessing over missing trades and not re entering, and then in the last piece I obsess about taking too many trades and limiting what I am trading.
This has been a problem with me for the last couple years. Probably my biggest issues as a trader. Is finding that balance between not taking the trades I need to, and avoiding the trades I shouldnt be involved in.
So whats the fix? Review your winners. I had a very low WR this month. Lower than most but not my worst. I look back at July to compare. July was also a very bad month for me.
I had the exact same issues I had this month. And also look at the SPY. Whole month we were in a range bound chop mess. And my big issue? Over trading and sizing up on trades that dont deserve it. Sounds very familiar to this month.
So now I recognize I have a pattern. In markets that are not breaking out and trending higher, I am not performing well. In August I could get away with a lot of early entries that were bullish, simply because we were in a clear bull market theme. Now that we have sold off in the start of September, that flat out does not apply anymore. And I think its taking me a few months of this to recognize that in my trading.
I should be ok with myself. I have dug deep and found the problems. And I have also worked for the solution. In July I came up with my risk plan per star ratings. New Trade management rules. In August I capitalized on it, for the most part, and made some good money. And now in September I am recognizing my bad habit patterns, and coming up with solutions to protect me from myself. And in this case it is having a trade entry checklist.
https://justadaytrader.blogspot.com/2020/06/2020-half-year-review.html
NUMBERS
-$1918
117/368 32%
75% Compliance
-10R
39 be, 81 full -1R, 59 more than -1R
Avg win +$65
Avg loss -$38
Avg risk $47
on W $45
on L $48
I was actually doing pretty good to start the month. 4/4 1st week. The following weeks were where I started to fall apart. I think because the market had changed and I couldnt adapt. I was still seeing good moves everyday, that on top of me still having issues with missing trades and re entering, led me to try and make up for it. I started taking anything again.
And it showed up in my stats. Started having 20+trades a day, huge red days, very frustrated. I went back and looked at my report cards and can see myself typing out every feeling im getting, all frustration. And I kept spinning the wheel over and over again without allowing myself the time to adjust, dig into review, and get going on a solution.
And now once I finally have, I took it slow, slowed waaaay down, and went back to basics. Didnt take any trades that werent completely clean and clear. Made entry checklist to help myself out. I got all my bases covered now, the rest is up to trusting my process and going through the motions.
JULY
https://justadaytrader.blogspot.com/2020/08/july-monthly-review.html
Got back from a decent month of June. Was in a nice spot coming off my half year review. My biggest issues were based on risk. Risking too much on trades that dont deserve it, and too little on the ones that do. Also settled for a lot less on plenty of trades. Interestingly enough, this September is almost a repeat of what happened in July. With regards to my trading and the market itself.
SPY had settled down after our big bounce and the whole month we were range bound. I could not adapt and got stuck in too much chop. I was overtrading, compliance was down I couldnt find a way out. New rules were needed.
I recognized that there were themes across industries. Pot stocks, beatdowns. When one would start going, they all would. So it made it nice and easy for a watchlist. Watch the industries that are moving. And that went well for me next month but I didnt capitalize on it well in July.
At the end of the month is when I really dug in to my trade stats and came up with new trade management rules. Which still now are working great for me. And it led me to having a great August.
AUGUST
https://justadaytrader.blogspot.com/2020/08/august-monthly-review.html
Had a really solid month. SPY in total uptrend. A lot of my success came from me following my trade management rules. The best wins I have I dont have to worry about exiting early, but on the ones that dont act like that, I make sure I leave the trade with a win.
I did not have the same problems I had in July. I wasnt over trading, wasnt missing much. An A grade month. I talked about the 1 mistake I did have and that was size. I was offsides on a lot of trades. Caused a lot of winners to be too small and losers to be too big. This was when I started sizing up into September.
3rd QUARTER NUMBERS
-$678
346/1052 33%
82% Compliance
+46R
143 be/236 Full -1R/148 more than -1R
Avg W +$68
Avg L -$34
Avg risk $41
Avg W day +$365
Avg L day -$351
560k shares traded.
Everything I need to succeed is in front of me. Ive gone through the process of losing endlessly and being clueless, to digging through my trades and finding clues to put together a process that allows me to trade at my best. At some point you grow into realizing its just a job. You do the work, you find what is best, you repeat what you do best. At the end of the day you win or lose and you do what you can to keep getting better. Sometimes the market wont let you win. It wont let your process be the best thing for you and thats when you have to adapt. Thats where I am now.
Stock selection is covered. I chose the best setups everyday based on D chart of high beta names. Includes breaking news/gappers as well.
Entry checklist is covered. If the trade doesnt meet each of these points before entry, I dont have a trade yet. Checklist is based off of what my best wins look like.
Ways of tagging/describing my trades is covered. I have a consistent process on how I record my trades and data.
Risk is covered. Or so I thought. My avg risk on trades gets skewed sometimes. Overall it is bigger than last month and that was my goal, but it also has to be proper. Cant just be whatever I want. I will talk about it more in the problems section.
Trade management is covered. I know what I should expect out of my trades and manage them in a way that cuts losses short, ensures I keep winners alive, and ensures I keep winners running, and ensures I walk away from a trade with money if it isnt acting right. Again all based on past best wins.
Re entry rules are covered. I know where and when I should be looking to get back in.
What else is left to think about? I think the goal for any trader is to get to the point they dont have to think about these things anymore, but only after so much thinking has been done. Im not there yet and everything has been a constant work in progress. Never settling on one thing for
Numbers here arent good but they arent bad either. My risk is up on average so I am trading bigger. My avg win still double my loss and with a 33% WR that puts me right at breakeven. So I know I am at a good foundation. As long as im not performing as bad as I did in July and September, the numbers tell me its my own problem Im not making money. A little miss here and there is turning into a huge deal. I know there were countless monster winners that I was watching go without me. My P/L this quarter would be positive if I literally just took 1 of them. Not even half, not a quarter, just one of them.
Just goes to show you have to take every trade that fits your criteria, regardless of how you feel. You never know which one is going to be the one. Or even simply a win or loss.
BIGGEST PROBLEMS
-Failure to recognize when I need to adapt to market conditions
-After the first big sell day is when I should have recognized that things have changed. That was the point that nothing in my trading was working the same was it was. I didnt change anything though, I didnt know that I needed to for one, and what I needed to change.
-Emotions hot.
-Me being confused and losing a lot really got to me this month. Taking loss after loss it was almost everyday every moment I was upset from the open. Doesnt lead to trading at my best, leads to depleting mental capital faster, leads to more losses ultimately. Not having a clear enough plan and rules.
-Burn out
-Ties in with the above. Really hard for me to keep giving 100% every morning when I was as frustrated as I am.
-Not being specific enough
-I ran into more stat recording issues. Lack of consistency was the main problem here. Was it a catch? Did I get it as it left me? Breakout? Momentum? Whats the difference between a scalp and regular LT trade? Was it the 1st time it was there? Or from a range?
-Letting the trade go
-This ties in with mental capital. Frustration leads to losing mental capital, which leads me to purposely not taking trades because I dont have it in me anymore. Maybe 10k max I left on the table from me not getting in the trade, not re entering and following re entry rules.
-Risk.
-I still have a flat 50$ per trade risk I am using on everything. Its hard to come up with a plan on where I need to be risking more. It needs to be decided before the day even begins.
Everything is connected. Emotions and your plans. Frustration and lack of awareness. Consistency and results. Calm mind and stress free trading. Improper preparation and planning leads to probable problems. I have to/ had to tighten up my game. No room for emotion and lack of a plan or lack of proper record keeping.
My focus needs to be re-grounding myself, so I can operate from a stable, consistent, foundation. If my core isnt tight and well understood, im not going to be able to trade well in any type of market.
SOLUTIONS
ADAPTING
-The market have changed. Ive seen it repeat what its doing in July and I failed, and now ive also failed in September. Ive gone through my trade review and seen what I need to do. The market runs in themes. Sometimes its metals, oil, pot stocks or biotech, sometimes its the entire market. Sometimes, its none at all. And thats what happened in both those months. SPY was no longer exploding higher and it showed in other names as well. Not every single trade had that momentum buying behind it. So now that the market isnt a clear buy anymore, thats one less edge I have when looking at a long trade. The solution is to trade less, and expect less.
EMOTIONS
-Im a person that likes to be prepared before hand. I like being aware of what im doing, not randomly going in without a plan. When Im not mentally prepared in anything, baseball, events, im not ready. And that makes me a bit anxious. No different when it comes to trading. And its no wonder that when I run into these losing streaks, I dont know whats going on, I trade more and still lose, it becomes a vicious cycle I cant break out of.
-Also leads to me getting burned out. I can only take so much pain before I have to force myself to sit back and do a deeper review as to whats going on with me. I did a lot of different blog posts this month. Took a personality test. Review of winners. Review of market conditions. Reviewed my trading plan. Happy to say that I have found new footing to work with and ready to move forward. But it took way too long for me to reach this point of coming up with a solution for myself.
-It came down to more rules. I dont need to question the gaps in my process, if I have rules for myself that cover every scenario. Sometimes it does take a bit of losing before you can realize that something is missing and you need to fill in the blanks. Other times its a matter of just doing the thing you need to be doing, or sometimes NOT doing the thing you shouldnt be doing.
-For me, more rules = less thinking = less stress = calm mind = better trading
SPECIFICTY
-Bella always says, How specific can you be? I was not specific enough for a long time. I knew it too. But I went along with it because I was winning. And why change anything if youre making good money most days.
-The main things I was not being specific with was tagging my trades. There were plenty of other variables to think about when labeling my trades but I marked them as a simple LT trade. Well Sometimes I took trades from ranges, sometimes it was on the 1st test of a level in a while. Sometimes it was on a breakout or as it was moving in favor. Was it a scalp or a longer hold? Whats the difference?
-There were way too many questions to ask myself and consider. Partly leading to the frustration. I settled on a number of things. And settled that there are things too numerous to tie to a single trading setup. For instance, its a breakout, but are all the MAs under it? What about value area is it a significant spot in MP? Or how about Anchored vwap, is it headed into it? Or just got above it? Is there a theme in the market? Bollinger bands? Fibonacci? It doesnt make sense to me to call a trade "TRIANGLE BREAKOUT WITH HALF MAS SUPPORTING, VALUE AREA LOCATION, ANCHORED VWAP, MULTIDAY CONSOLDIATION BREAK." But what does make sense to me, is to tally those things. Keep it a simple label like triangle breakout, or reversal. And then tag each trade with an x if it has a key variable on the D chart. Looks like this
-And thats just before the market opens. After its a different story. Were all trying to navigate the market in the best way we know how. I figured out how I want to label my intraday entries/adds as well.
-It sits well with me. Makes me happy. Each entry is labeled from where in structure it came from. 1st time or from range. Then what kind of starter was it? Or add? Was it a catch as it got right to the level and came off? Was it as we went with momentum in the direction I want? Or was it on a breakout? Scalps are totally separate from my big ideas. A scalp is strictly intraday action that I think we have a good shot at make a short quick move right here right now. Reversals still its own thing. BIG is spotting huge bid/offer and getting in in front. And re entries are re entries. But even further..
-I keep track of market conditions leading up to that point of entry. I know from my rules that if I dont have 6 x's here on these intraday trades, I have no business getting involved because I dont make money from anything less than 6 checks in my favor. Thats just me. Trying to dig to find edge.
-So I feel like I have a solution here for me and my trading. I watch every SMB vid that comes out and this is what I mainly see from them. They are trading breaking news plays or earnings and the days to come after that. And I definitely can do that, but its not my main focus yet. I have a tag for news event trades as well and ill use it when I have to. But I dont have something like Breaking news, gap higher, growth momentum stock, positive beat earnings, opening drive. Things like that. Ill still trade the same names, but based on price action alone. If the short is there and I see it ill take it. I may not have as big a picture of an idea as some of these guys, but I know I can still get a piece and follow my strengths. Not just what the best are doing.
-Bottom line is i have tidied up my record keeping. The more the better in almost all cases and thats also where I need to focus my risk. I trade thats only got 2 ticks on D chart, probably isnt the trade I want to risk $200 on. A trade that has 8 ticks on D setup, thats the one I want to be looking to risk more. But if intraday it only gives me 4 ticks, then I probably will avoid it until intraday it meets my standards better. But if I get 8 on D, and 8 intraday, thats the full speed ahead signal.
-LETTING IT GO / MISSING TRADES
-I feel everything I have talked about up to this point answers any concerns I may have had around this. Proper preparation and planning. These pics are trades I was either a part of at one point but missed the bigger move, or flat out missed it all.
-This is only September, and its not even half of them. I feel in a much better clearer spot not that I have more rules. Theres no excuse. If I follow my rules, I dont miss these moves. Part of it is me not willing to accept losses. Part of it is laziness. Part of it was lack of preparedness. Now that I have rules to guide me, I should be ok.
-As long as I cant stay calm and focused. Keeping an eye on stocks around levels I want to trade against, set alerts for when its there. I can be a part of the trades im supposed to be in. If I look at a stock and im not in, but I think I should be in, then I should get in right away and look to add later. There is nothing wrong with taking smaller size to start, to get a piece in on the big picture idea.
-RISK
-I need a better risk plan. I know youre not supposed to compare yourself to other trades, but I constantly see others posting there P/L and you see things like this.
-Just a big mix of big wins, small wins and small losers. The way I trade, Ill never see a day where im red 400 on one, positive 400 on another, and then +20k on one. The only possibility here, is that there are larger bets placed on certain trades that you have high expectations, and lower bets on lesser expectations.
-It does not make sense to me to be placing the same amount of risk on every trade regardless of circumstances. It doesnt happen in baseball, doesnt happen in poker, doesnt happen in the betting world, the same should be true with trading. But it has not been in mine.
-So what needs to change. I need to find a risk system that fits me. I already did one a while back, heres what I came up with.
RISK PLAN
Favorite setups
-Obviously deserve the most risk. These are trades I will start uncomfortably big, and only get bigger.
-Starter with 75$ risk on initial entry as it is the best RR start.
-Add 75$, essentially double size.
-Then add $50, cut add in half.
10/9 ⭐setups
-Still best deserve more.
-Start with 50$ risk
-Add $50
-Add $25
8 ⭐ or less
-Its still a setup in my edge, but missing a few points
-Start $30
-Add $30
-Add $15
I need to be risking more on my best, and not more on my lesser setups. Im taking too many big hits on trades that are lower star ratings/not my favorites/ not ideal. Best trades are around HTF levels with tape vol cues and markets help. If I dont have some of those, its not my best, it does not deserve more money on the line.
The other downside from this is that it takes me too long to recognize what kind of star rating it is. I need a better system for this.
I already have premarket points labeled on the stocks now. Usually its a 4 or 5. The other ones I have to recognize in real time usually within moments.
Other possible points are.
1. Tape.
2. Volume
3. Relative strength/weakness
4. Market conditions aligned with trade
5. Clean clear PA at HTF levels.
6. Failure
7. RVOL
8. Significant HTF level, not just any
If It is a 5, and gets 5 more, its a 10 and I need to be getting bigger on it, stepping up size. If Its a 10 and a favorite, I need to get to max BP
-This was 2 months ago mid July. Looking at it now im missing majority of the picture. Im not considering D variables/themes at all. And im also not even taking 8/9 star setups anymore.
-Lets start with the best. What trades are the BEST of mine. Well with what Ive recorded and reviewed, is mainly based off of intraday data, not so much on the daily chart. I know what my best trades look like intraday. I know from exp my best trades also come from themes in the market. They arent just one off breakouts of a stock in the energy sector or something. Theyve been on the beatdown names. Airlines/cruise. When they are all running higher and the one that gives me a setup at my locations, thats where the good stuff is. RVOL also a v important factor. The more the better. Clear market conditions helping.
-Back to being more specific where I listed all the possible D checks. Multiple setups in one is huge. A failed break lower, into a TL break combined with range breakout is big. News catalysts also big, leads to more volume. Volume is of course a key factor. So seeing a big spike will be necessary. Value area can be crucial too, but 9/10 a break of VA is also right in line with your typical D hi/lo breakout. Multiple days consolidation is big. The more traders involved, the bigger the moves. A best trade would not be a straight line right to the breakout point. It would be coiled and tight. MA support can be big. Best trades would have all MAs coiled tight and supporting. A big pivot level is helpful, but I wouldnt say Id only look to increase risk on those alone. Failed break opposite direction is a big cue we want opposite direction. Adds good power. Anchored vwap I do not have enough exp using yet. I imagine it wouldnt help with breakouts, but rather turning trades. Trades that have pulled back after a breakout to an anchored vwap level among other things, may add to case. Short float will of course help a long out.
-Lots to pay attention to but its really not that hard. All work is done before the button is clicked anyways. The trade that deserves the most risk based on D chart alone will have
-Multiple setups/breaks at one location
-Increased vol day/days before
-Long consolidation (at least a week)
-Failed break opposite direction
-Theme across market/industry/sector
-MAs NOT in the way, supporting
-And thats it. Those are the key factors on a D chart that should lead me to put more risk on my entries intraday, IF, the intraday setup meets my criteria for entry. These are my max bp setups. Max risk of 300$, 100$ per entry.
-Then I have other setups that dont meet these criteria. Its either they meet some, or only 1 or 2. The one or two will be much less on entries, start $25, and then add as it goes. And for the trades that meet a few but not all, will be $50 and add from there.
-I think ive been getting caught up determining risk based on smaller picture ideas rather than big picture. I keep wanting to risk more or less based on what intraday data is telling me, rather than reversing it and looking to risk more on what D data is telling me, and then looking intraday for confirmation.
-I feel a ton better. September was pretty rough for me. Had a week where I went 2/56. Could not catch a win for the life of me. Was pretty down on myself for a while. Its impressive I remember a chat with traders ep with Dan shapiro where he said you can go 2 weeks straight making money every day, then 2 days in a row of losses and you lose all confidence. Well mine was a lot worse than that, and confidence was pretty low. Found myself not even wanting to click the button to trade but just watch it and see what happens without me.
-Glad im in a more confident place now. Good reviews always bring me back up. Feeling really good about these solutions. Putting myself back in a place where I dont need to question my process, I just need to trade and let the numbers do there thing. Come back a month later and dig deep again and see where im at.
PREVIOUS GOALS
-Size Up. 2 $1000 Wins
-Well I did size up in the end. Doesnt matter much because they were losses but I did size up in a lot of trades. I definitely was originally part of a few 4 figure trades, but in the end I didnt capture it.
-Get used to having bigger positions on from adding to winners
-I did get used to it. But again, mostly losses so it sucks it didnt help me make more money. I have found im growing more immune to having a good chunk of money on the line which is good. Once I get back in my groove ill be able to capitalize better.
-More detailed risk plan on adding. How much? How many times?
-I have come to some conclusions on this. I like to add just twice, from that point on RR is pretty far gone. I dont mind adding more at a later time if structure is still good, but that doesnt happen in every trade. It is same size adds.
THINGS THAT ARE CHANGING
-Need to focus on gap stocks again. In this kind of environment the stocks that have the most RVOL and vol can ignore what the overall market is doing. This also means I need to reduce my watchlist. Dont look at the ones that are anything less than perfect. Reduce and quality over quantity.
-Risk Plan.
-Trades that deserve max BP
-Multiple setups/breaks at one location/Increased vol day/days before/Long consolidation (at least a week)/Failed break opposite direction/Theme across market/industry/sector/MAs NOT in the way, supporting
-These are the setups I see before the day starts that I know I will be risking more on once I have the right intraday setups. $100 an entry for risk.
-Trades that deserve 50$ risk per entry
-D setups that have 4 or more checks in favor
-Trades that deserve 25$ per starter, and add $50 if winning.
-D setups with 3 or less checks in favor.
-Risk is decided before the trade happens. Is based on D variables. Intraday variables only allow entry, have nothing to do with risk size.
-Missing trades. Should no longer happen. I have rules now for every scenario to get involved in the trade. At breakout, with momentum, or at the level I want to catch it at.
-Consistency. My setups are defined. Before during and after. Risk is defined. Before. Criteria for entry defined. Trade management defined. Re entry rules refined.
-Less emotions. Now that I have a rule for everything, combined of all my strengths and best trades, of course there will still be times that I am heated, but there shouldnt be any more days where im lost and confused after a day. As long as I am following my rules, the process will take care of itself. Everything I have done up to this point is a constant process of improving my process and eliminating mistakes. Im finally in a spot in my career that I have a rule for everything.
-Less trading. If market is choppy and range bound, its going to be harder for me to get good setups. Which means I need to be more strict about what I am taking.
GOALS FOR END OF OCTOBER
-Revisit risk plan. Find if its right for me.
-Trade less. Really focus on quality. No more than 24 on watchlist on any given day.
-Missed trades folder should have no more than 5 screenshots in it.
-Clearer overall picture on momentum scalps
-Sober October.
-5AM workout schedule
GOALS FOR END OF YEAR
-Positive P/L
-Clear risk plan
-Find best D setups for me
-Get very good at not missing trades that are my setups.
-Experiment with options and swings
-Finish that 5th book. (Will probably be on 6th or 7th)
-5AM workout schedule
-Wedding planning 90% done
FINAL THOUGHTS
-What a review. Took me about 5 days several hours. All to just say 'trade less and only trade what you know works best.' But thats what trading is. For me. Gone through this many times. Always come out a better more responsible trader with a better plan for improvement. Time to trade.
EDIT
-Last night started thinking about risk again. I thought about other traders and how they have a core position and adds to the core. And I started thinking about how lately more often than not I am right, but not yet. I usually end up getting out, looking to get back in at some other point. And that point is 9/10 a worse price than the original entry I get. I look to get back in as the trade resets and looks better. And suddenly it just came to me what I was supposed to do.
1. Original starter entry, IS the core position. This is where my risk is based off of pivot levels to give big idea the chance it needs. Risk $$ is based off of D checks still
2. Adds to the core are just adds. Risk $$ is still based off D checks. But risk location is based on tape. Still playing off of strengths of best trades go and never come back.
3. IF ends up coming back, take off adds only. Keep the core on and keep the best prices entry.
4. Look to get those adds back on as trade has momentum again.
5. Exit core at proper pivot point and wait for trade to completely reset.
I remember hearing all the time on SMB and 7points about trading around a core/scalping around a core and building it. I believe this is how it is done. This allows me to remain in my big picture idea, and still leave the idea on for longer term picture with ability to get the adds in as it starts working. AND still eliminate unnecessary risk by trading around how I know my best wins work. Its a fix for all and its really sitting right with me.
Comments
Post a Comment