One of our new traders got ripped by a Senior Trader on our desk in the email below. I thought all of this was awesome. I loved that the new trader sought some extra help. And the advice given was spot on. As a mentor it is our job to tell the new trader the truth.
Further, there are a ton of new traders out there that are making the same mistakes as our new trader. In fact there are a ton on our desk. Also, when you begin your trading career you’re supposed to struggle. Think of it as joining the Westchester Country Club. They don’t let everyone in. And those that are selected have to wait. But your goal must be to improve everyday. You must be self-critical. Seek and implement constructive criticism.
When I first began I was 36k in the hole, with no data to suggest that I would improve. I needed to be honest with myself and make adjustments. This is all a part of the learning curve. So if you’re a new trader and struggling I have been there. But you must ask how can I get better? You should be that trader in the ear of a successful trader. If that successful trader goes to lunch then go with him. One our better new traders walked with me 15 blocks to my gym talking trading. If that seasoned pro stays late ripping through charts then be there with him. And then you must follow through and make these adjustments. It’s ok to struggle. But it’s not ok to think your trading will get better without critique. Einstein said, “the definition of insanity is doing the same thing over and over and expecting different results. ”
Here’s the email (ouch!):
Your work needs serious improvement. You need to sit down and think about how to correct the following:
1. Stick to one stock on the open. I see you jumping from one stock to another too often on the open. Yesterday you traded six stocks by 10:30. This is unacceptable. How do you expect to gain an edge on a stock if you keep going from one to another? Keep it to two stocks on the open!
2. Flipping. I don’t get why you are trying to focus on this advanced technique. Add up all your flipping losses vs your winners everyday. You are losing at least ten times more than what you are making. Eliminate this from your work now.
3. Fading/fighting the trend. This is another technique that is too early in your career to master. You’re getting smacked fading stocks. Again, review your numbers. They don’t lie.
4. Trading other stocks besides HK, CHK, XTO and MEE: I know there was a lot of money in these stocks while you guys were training but the stocks have changed. You don’t see Dov and Danny killing the stock anymore. It’s too hard now. It’s time to move on. Look at your monthly numbers and if your TA is not higher than 3-4 on any of these stocks you have to stop trading them until they get back in play.
Overall you should be focusing on the easy money. Buying supports, shorting resistance, playing held bids, held offers, unusual holds, get in front of a big order, consolidation, and ranges. This flipping and fading nonsense needs to stop until you can profitably learn the plays just mentioned.
Let me know if you have questions.