A Pro Trader Shares His Goals For 2013Jan 6th, 2013 | By Bella | Category: Mike Bellafiore's (Bella's) Blogs
Our Floor Manager asked our traders to develop their goals for 2013. One newb did so below. His works is educational for the new, experienced, developing and underperforming trader. A few comments:
1) Notice how self-aware this trader is of his strengths and weaknesses. Are you?
2) Your job as a trader is not to be right it is to control your risk
3) Be hardest on yourself for the trades that work
4) With your best set ups find more of them and trade them bigger
5) Take note of the detail and specificity to his solutions
6) I would disagree with this trader about monetary goals. I like the idea of having process AND production goals. After all this is a performance sport. It is not enough to be an all-star at process. You must also execute when the lights are turned on. And striving to hit certain P&L goals helps ensure you do all the little things you need to do to recognize this goal.
What are your goals for 2013?
Here are the goals for 2013 from a pro trader.
I did not reach a lot of my goals that I had set for myself by this time in my career for a couple reasons. First I think I tend to set pretty lofty goals for myself and expect immediate achievement in everything I do which just is not realistic for the PnL goals this early in the career. I am still learning a lot every day about trading and about myself as a trader. I put a lot of unnecessary stress on myself to become a big trader too soon and was not letting plays come to me and was forcing things (something I have already improved on since the last time I made yearly goals a few months ago). Until fairly recently I have been focused so much on the setups, psychology of the market/play, and technical analysis, and not enough time on my own psychology and trade management. I have been finding a lot of really good setups but my trade management (sizing, and exits) have been atrocious and is easily the most tangible thing that has been holding me back. I think a lot of it has to do with my overall psychology of trading and what my purpose is here at SMB Capital. I am putting way too much emphasis on simply “being right” and not about “being right to make as much money as it will let me.” I have been too content with simply finding the setup, being in the trade, and profiting from it, but how much I profit off of it has never bothered me as much as it should. Now that am finding more setups that suit my fancy the focus needs to be much more on sizing and maximizing the profit from the trade in high probability low risk ways.
Since I have been adding my daily rules to my daily trade idea sheet I have been much more consistent in my profits, but have not been making enough off of them to make up enough for my loosing days. Daily rules/check/psychology list items:
- Sniper mentality; do not have to be in every trade, but need to snipe your personal plays
- Higher time frame trading is imperative – don’t get caught up in the noise especially in the middle of the day
- Innocent until proven guilty (this is one I struggle with the most)
- Tell whole story of the setup (LT & ST)
- Trim and Trail (Need to do more trailing and less just taking off profits)
- Bid & Offer for great prices (make more and spend less – sweep as little as possible)
- Volume Volume Volume
- Set obsessive alerts
- Use trend lines when ever possible as guides
- Relax – take more breaks, get up walk around, clear your head to see more clearly
- Trading is the art of making money not – never hated a profit
I don’t want to set a monetary goal for the next month, quarter, year. I want to be as profitable as my setups will allow me. I need to work to improve my trade management to make each trade a masterpiece beyond the entry. Sizing is a big piece of allowing myself to trade properly I need to give myself the chance to do that by making sure I have enough size in plays. I am good about having “if, then” ideas for entries but get too relaxed once the trade is in motion and need to make sure I have if-thens for once the trade begins to work and stick to them. I do this sometimes but not nearly enough. I think my daily rules are good guides and I need to be harder on myself each time I break one of these rules/guides. One rule that I need to add, and I believe it was Bella that said this: “Should have uncomfortable size in what you think are your best ideas for the day.” Also want to be more of a contributing member to the firm and I think it will be best for my learning and profitability as well if more people are in the same trades that I found to see how others might see it and manage it along the way. I think the preparation and review of plays are fine but need to be harder on my own psychology and need to spend more time reviewing how I was feeling, what I was thinking during each trade for its duration or why you missed one in my daily review.
- Become the best trader I can be every day.
- Work to hone a “play-to-win/dodge-to-score” attitude. Should not care if you were right but rather how well you traded something. It doesn’t matter if you broke the guy’s ankles if you don’t put the ball in the net. This is not a hobby (even though it is enjoyable every day), it is your job and need to approach it as such.
- Add at least 1 idea to the morning idea sheet every day (just got access to do that today)
- Chirp more levels and stocks I am looking at in the VTF (if I don’t feel comfortable telling others I am in it or watching it, then I probably shouldn’t be wasting my time with it)
- Continue to work on discipline and stock choice – try to focus on the ones Bella would get mad at you if you were not in.
- Get “uncomfortably big” in your best ideas. Need to give yourself a chance to trade it properly and hold for the big move, and potentially even the unexpected extension of the move. Need to be big enough so that you can trail some and leave some against the original stop, especially on breakouts like BIIB today.
- Don’t micro-manage stocks too much in the middle of the day and especially when the stock is simply “a long above X level.” Get it, take some risk off into the first high probability move and then make it prove you wrong.
- Set at least 9 alerts every morning (arbitrary number but start there)
- Shoot for 40% liquidity added every day (will pay benefits because you are getting better prices and it will cost less)
- Continue to do a playbook every day – need to be harder on yourself on the management portion
- On daily prep every morning have a quick emotional release journal entry, get it all out
- Already have a small section in daily review for personal psychology but need to expand this and focus a lot more on this. Feelings, emotions, before, during and after every trade. Why didn’t you add, get bigger, take risk off, trail instead of bid/offer etc.
- Keep reviewing your rules every day, and review this document you are currently writing every week.
- Set a broader weekly goal every week apart from your daily checklist/goals
- For some reason profitable days are not as enjoyable, as losing days are painful. I think it is because I expect to be profitable so it does not draw as much emotion. Need to feel better about winning and fuel the thirst for taking more from the market.