A tough trading market

BellaMike Bellafiore's (Bella's) Blogs6 Comments

It has been tough trading out there of last for most.  Here are some emails that I have received from traders:

today was another bad day, cant seem to get a grip on this market, not alot of volume it feels to many shake outs, feel like shutting it down for the year. Im not even making terrbible trades just nothing is really working for me at all.

and then:

You know I made a couple important mistakes today that cost me being up 200 or 400 dollars.. it
wasn’t an easy day by any means… I am happy that I didn’t try to push my luck today.. it was an
easy day to overtrade
The goal this week again is to stay selective.. and I did I was very very light on tickets… I didn’t
try to trade too much.. I was in okay stocks.. the problem was that I risked too much comparably
on plays that didn’t start working for me… and I got back in that vmc too much trying to be too
cute
I was setup really short to make ncie money if the market did crack out of the huge bear flag
it was forming.. and I think that was the right trade… but it has been difficult lately.. and many
times the opposite of what you think will happen happens
I am going to continue to be selective.. but to make sure to press it if I see a really good
opportunity… basically trying to be a sniper because that is what this market requires…
So I am doing a good job of not killing myself… but I need to be as close to pefect as possible to
grind out some $$ that I know I can each day… so I am going to keep pushing and keep
being selective
and then:
The last few weeks for me have been brutal as a trader – I have not been in a slump like this in several months. I’m not necessarily losing a lot of money (only down about 1k in 3 weeks) but every day has been scratch after scratch. I’ve recognized part of the main problem, which was being in the wrong stocks, and since my losses have reduced, however, I’m still having a mix of days, most days ending -$30 to -$80, and of course, those add up.
I’ve been taking progressive action, as I should (reviewing trades, going back to basics, lowering tier size, only trading high probability setups I understand) but the slump continues. I’ve scoured the SMB blog for posts about getting out of a slump and have re-read those sections in your book, but are there any other sources you recommend? They don’t have to necessarily do with trading – if they’re just psychological exercises, etc. It really has done nothing to me except hurt my psych – it is easy to recognize a passion when that passion can beat you down senselessly yet you keep coming back to it, trying to fix it.
What adjustments are you making for this market?  What is working best for you?
Bella

no relevant positions

6 Comments on “A tough trading market”

  1. It has been very difficult since mid November.     This is definitely a re-evaluate period for me to find what works best for the moment (since volume will return next month….hopefully!)……as low volume choppy flatness is by far the most difficult environment for me to trade.   My performance has suffered lately also.

  2. Book profits.  This is a tough market to stay in trades.  When I am short an extremely weak stock, and I feel like I should be adding, I take covers.  When I am long a strong stock, and I feel like I should be adding, I take sales.  That is what has worked for me.  Sure, occasionally I will miss making a little more, but it prevents me from adding, watching the stock reverse and stop me out for a losing trade. . . As far as trading fundamentals go, it isn’t the right thing to do.  But, it is the right thing to do for me now in this tape.

  3. I agree with you.  Today upon trade review realized that booking smaller 25, 30, etc cent gains would have put me in a much better position end of day vs where I landed.  I was looking for too much in a narrow range.  When you’re used to larger chops…….taking small profits seems initially as as “duck & run” routine out of fear.   But w/ this market as is……take the small 5oz steak………..the 12 oz will surface again later.   I’ve kind of come to that conclusion after today for rest of year.   Take the small pieces….

  4. I couldn’t agree more with BigBaby. The past few days have been tougher than usual and the one thing i have noted each day is… Book smaller gains. And stick to your high quality setups.

  5. re-reading Dr.Steenbarger’s “The daily trading coach”, it helps. It is a good time to work on your focus, concentration, discipline, trade quality.

  6. Diversifying on various timeframes makes sense. When the volatility changes, change the timeframe. For example, trading off the 5m chart made sense in June-July, but later in August-September, using the 1m seems more appropriate. What seems choppy in one timeframe might be trendy in another one (usually a lower one).

    Having a system that works on different timeframes is useful to adapt. If you don’t have one, make sure you know how to stay on the sidelines and stay safe in the meantime.

    Good luck to everyone in this market ; as hard as the conditions are, it’s a great time to learn how to adapt.

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