Happy New Year! At this time of the year many traders are drafting their goals for the new year. This is a good exercise. I believe in work. I believe that progress takes time. But all progress must start with a thoughtful, and ambitious plan. I have seen mediocre traders become great. I have seen poor traders become excellent. I have watched excellent traders become superstars. You can change. You can get better. The person who controls your trading future is you. Henry David Thoureau wrote, “I know of no more encouraging fact than the unquestioned ability of a man to elevate is life by conscious endeavor.” It starts with these goals.

Overall my trading is very consistent. I am net positive at least 80 percent of my trading days. I don’t go a few months without making money. In fact, I have been positive every single month save one in the last five years. And I would like for this to continue. But I have weaknesses. I would like to get better. I love how JToma is constantly griping, “how can I get better?” I want to get better.

To get better will take some work on my end. I need to consider my Trades to Hold strategy. There are more plays that I can add size to and hold for longer. When I spot a stock break from a level with significant intraday volume I should add some more size and hold until there is a reason to exit.

At times I still get frustrated too easily. It is very difficult to trade and teach. And during the day I talk through exactly what I am thinking and doing for our new traders so that they can learn. At times this is distracting. This week Steve and I met with and old school, excellent trader who wanted to get back into the game. And we talked about how he might help us. And I described talking through trades, working with traders, and actively trading. He politely smiled and said that he had tried to do that in the past and that that was just too hard for him. I understood.

At times it is incredibly stressful to run a desk, teach, solve SMB problems, and trade. And I can get frustrated. But it is a privilege to be so challenged. Three years ago I sought a bigger challenge than just trading. I had done that. It just wasn’t enough anymore for me. It wasn’t a big enough challenge. And Steve and I had so much to share with new and experienced traders. I enjoy the long hours, complicated problem solving, planning SMB growth, mentoring traders, writing trading lectures, recruiting, working on www.smbtraining.com, and trading. And people from all over the world seek us out because we are very good at it.

It is all so much. And I like it that way. I love that at the end of the day when I come home, sit on my couch, that my brain actually hurts. Some think I am watching TV but I am really just resting my brain. Steve and I laugh about this. I have gone to law school. I worked in politics for one of the most important, intellectually curious state politicians in Connecticut history, where you worked until your boss was done. I remember sifting through hundreds of pages of documents as a Trustee making sense of UConn’s immense, intricate budget. And I have never experienced my brain actually needing rest until we started SMB. I love that at the end of the day I have absolutely nothing left. So I will continue to religiously do my visualization exercises. This will help stave periodic moments of trading frustration. But I need to get better at this.

I have gained about twenty-five pounds since we started SMB. This has hurt my trading. Being physically fit is important for trading. The days are long. You must focus for extended periods of time. Being fit helps with this. I wouldn’t say I am overweight but I would be better off at a lighter weight. I need to make sure I get to the gym 5 days a week next year. My diet has always been excellent. I eat very well, maybe a little too much at times. I tend to snack a bit too much lying on my couch at the end of the day. I don’t really drink other than the occasional glass of red wine. So it really is about eating a little less and getting to the gym more. Improving my physical fitness needs to be a priority in 09.

My fading strategy should be more consistent. I do not like to teach much fading to our new traders because it is too difficult for them to master so early in their careers. And it takes away from their attention on following the trend. And following the trend should be the focus when they begin. But as an experienced trader I have learned there are times to fade a stock. Since I explain everything I am doing while trading often I do not fade. I do not want our traders to learn this technique at this stage. Also in this trending market I trade the trend much more than I did in past markets.

I will fade a trending stock when I notice clearly, and with little doubt, a pattern change in the stock. I will fade a trending stock when I notice something clearly, and with little doubt, significantly different in the box that suggests the trend will end. I will fade stocks in an intraday trend that meets a significant longer term resistance level. I will not fade a stock because I feel the stock has moved too aggressively in a particular direction. I will not fade because of my feel without the tape, the order flow, also confirming a potential reversal. And I will not broadcast these trades to our newer traders. I will just make them.

So this is what I will work on this year. I will let you know how I am doing throughout the year. And we look forward to sharing our trading stories and market lessons with you during this new year.

Best of luck in 09!