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.\u00a0 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).\u00a0 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.\u00a0 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.\u00a0 I think a lot of it has to do with my overall psychology of trading and what my purpose is here at SMB Capital.\u00a0 I am putting way too much emphasis on simply \u201cbeing right\u201d and not about \u201cbeing right to make as much money as it will let me.\u201d\u00a0 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.\u00a0 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.<\/p>\n
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.\u00a0 Daily rules\/check\/psychology list items:<\/p>\n
–\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Sniper mentality; do not have to be in every trade, but need to snipe your personal plays<\/p>\n
–\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Higher time frame trading is imperative \u2013 don\u2019t get caught up in the noise especially in the middle of the day<\/p>\n
–\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Innocent until proven guilty (this is one I struggle with the most)<\/p>\n
–\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Tell whole story of the setup (LT & ST)<\/p>\n
–\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Trim and Trail (Need to do more trailing and less just taking off profits)<\/p>\n
–\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Bid & Offer for great prices (make more and spend less \u2013 sweep as little as possible)<\/p>\n
–\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Volume Volume Volume<\/p>\n
–\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Set obsessive alerts<\/p>\n
–\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Use trend lines when ever possible as guides<\/p>\n
–\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Relax \u2013 take more breaks, get up walk around, clear your head to see more clearly<\/p>\n
–\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Trading is the art of making money not \u2013 never hated a profit<\/p>\n
Going Forward:<\/strong><\/p>\n I don\u2019t want to set a monetary goal for the next month, quarter, year. I want to be as profitable as my setups will allow me.\u00a0 I need to work to improve my trade management to make each trade a masterpiece beyond the entry.\u00a0 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.\u00a0 I am good about having \u201cif, then\u201d 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.\u00a0 I do this sometimes but not nearly enough.\u00a0 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.\u00a0 One rule that I need to add, and I believe it was Bella that said this: \u201cShould have uncomfortable size in what you think are your best ideas for the day.\u201d\u00a0 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.<\/p>\n Goals:<\/p>\n –\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Become the best trader I can be every day.<\/p>\n –\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Work to hone a \u201cplay-to-win\/dodge-to-score\u201d attitude.\u00a0 Should not care if you were right but rather how well you traded something.\u00a0 It doesn\u2019t matter if you broke the guy\u2019s ankles if you don\u2019t 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.<\/p>\n <\/p>\n How:<\/p>\n –\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Add at least 1 idea to the morning idea sheet every day (just got access to do that today)<\/p>\n –\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Chirp more levels and stocks I am looking at in the VTF (if I don\u2019t feel comfortable telling others I am in it or watching it, then I probably shouldn\u2019t be wasting my time with it)<\/p>\n –\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Continue to work on discipline and stock choice \u2013 try to focus on the ones Bella would get mad at you if you were not in.<\/p>\n –\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Get \u201cuncomfortably big\u201d in your best ideas.\u00a0 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.\u00a0 Need to be big enough so that you can trail some and leave some against the original stop, especially on breakouts like BIIB today.<\/p>\n –\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Don\u2019t micro-manage stocks too much in the middle of the day and especially when the stock is simply \u201ca long above X level.\u201d Get it, take some risk off into the first high probability move and then make it prove you wrong.<\/p>\n –\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Set at least 9 alerts every morning (arbitrary number but start there)<\/p>\n –\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Shoot for 40% liquidity added every day (will pay benefits because you are getting better prices and it will cost less)<\/p>\n –\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Continue to do a playbook every day \u2013 need to be harder on yourself on the management portion<\/p>\n –\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 On daily prep every morning have a quick emotional release journal entry, get it all out<\/p>\n –\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Already have a small section in daily review for personal psychology but need to expand this and focus a lot more on this.\u00a0 Feelings, emotions, before, during and after every trade. Why didn\u2019t you add, get bigger, take risk off, trail instead of bid\/offer etc.<\/p>\n –\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Keep reviewing your rules every day, and review this document you are currently writing every week.<\/p>\n –\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Set a broader weekly goal every week apart from your daily checklist\/goals<\/p>\n –\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 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.\u00a0 Need to feel better about winning and fuel the thirst for taking more from the market.<\/p>\n Mike Bellafiore<\/p>\n One Good Trade<\/a><\/p>\n
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