{"id":5452,"date":"2010-06-21T18:24:20","date_gmt":"2010-06-21T22:24:20","guid":{"rendered":"http:\/\/www.smbtraining.com\/blog\/?p=5452"},"modified":"2023-08-01T20:51:10","modified_gmt":"2023-08-02T00:51:10","slug":"traders-ask-how-do-i-make-adjustments","status":"publish","type":"post","link":"https:\/\/www.smbtraining.com\/blog\/traders-ask-how-do-i-make-adjustments","title":{"rendered":"Traders Ask: How Do I Make Adjustments?"},"content":{"rendered":"

I received the following email from trader Angel:<\/p>\n

Hey Mike!<\/p>\n

I hope that my email finds you well. I have topic that may benefit some other readers as well. It’s about re-inventing the wheel. Back in april and early may I was trading very well. I had multiple $1,000 days and even a $3,000 day. However, when the volatility increased things went haywire. I had to learn how to trade in volatile markets. I went forth in trying to change my total approach to trading, rather than simply changing my execution technique. In essence what I did was try to re-invent the wheel, rather than simply change a small portion of my trading style. Today I now realize that I temporarily lost some of the good habits that made me money. It would be nice to hear your take on this. From your experience, what is the best way to make these small adjustments without compromising your entire trading process? I feel that this is especially important when we have sentiment\/volatility changes in the marketplace.<\/p>\n

I can’t wait to hear from you!<\/p>\n

Coach Bella responds:<\/strong><\/p>\n

First great job of recognizing there is a problem with your trading. Most bang and scream and carp all the way to no improvement. And it is awesome that you have that positive trading experience in April to build off of.<\/p>\n

As traders we become better by identifying trades that make the most sense to us and trading them with more size and more often. Along the way we should also search for new trading plays to add to our quiver. For example Magic Johnson was always looking to improve, and after winning another championship, he added a sky hook to his offensive arsenal. Magic didn’t stop pushing the ball, making amazing no-look passes. He just added another move to help score in the half-court. He supplemented his Hall-of-Fame game.<\/p>\n

For a trading example, lately the trades that have worked best are intraday swing trades. Find a trending stock, find a good entry, and then hold for a multiple point move. And then came V today.<\/p>\n

V was a momentum stock. The trade was developing a position in the direction of the trend and adding and lightening up along the way. We were not sure if V would trade higher. We were not sure if the news was good or bad. The squawk guy seemed to say something contradictory every half hour. Good news, then bad news, then nuetral news, then I am not sure<\/em> news.<\/p>\n

It was both hands on the wheel, quick decision, mentally flexible trading. It was GS circa the fall of ’09 all over again, but to a much less volatile scale. Yet the same trading principles applied.<\/p>\n

After the close I lectured our new traders that they must learn how to trade such momentum patterns. These are the patterns I learned during the Internet Bubble. There are desks that just trade momentum and make serious bank. So we discussed how to trade this set up.<\/p>\n

So for these new traders focusing on their strengths but also working on trading momentum to expand their game is necessary. That does not mean jump in with max size, after a sharp upmove in V. It means the next time they spot a V, they dip their toes into the water, with one lot, with a tight stop, and a good price. They gain experience trading momentum live. They journal about these plays after the close. And talk about them with other traders. And rewatch tape of their trading. And talk to their mentors. And visualize these set ups. And simulate these trades if possible.<\/p>\n

You cannot get good at anything if you do not practice. Your new techniques are not working because you have not developed the skill necessary for them to work.<\/p>\n

So focus on what makes the most sense to you. And slowly work on adding a new play to your quiver when applicable. And work on this play, simulate this set up to gain the skill to trade it live.<\/p>\n

The last chapter in One Good Trade<\/a><\/em>\u00a0is about all the different trading styles I have had to learn to prosper as a trader. You must keep learning new plays. But do so while you are focusing on the plays that make the most sense to you.<\/p>\n

Best of luck! And thanks for the question.<\/p>\n","protected":false},"excerpt":{"rendered":"

I received the following email from trader Angel: Hey Mike! I hope that my email finds you well. I have topic that may benefit some other readers as well. It’s about re-inventing the wheel. Back in april and early may I was trading very well. I had multiple $1,000 days and even a $3,000 day. However, when the volatility increased … Read More<\/a><\/p>\n","protected":false},"author":144,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[490,4674,30,50,18,4682,364],"class_list":["post-5452","post","type-post","status-publish","format-standard","hentry","category-general-comments-2","tag-adapt","tag-one-good-trade","tag-prop-trading","tag-proprietary-trading","tag-smb-capital","tag-traders-ask","tag-wiley","no-post-thumbnail"],"yoast_head":"\nTraders Ask: How Do I Make Adjustments? | SMB Training<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.smbtraining.com\/blog\/traders-ask-how-do-i-make-adjustments\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Traders Ask: How Do I Make Adjustments? | SMB Training\" \/>\n<meta property=\"og:description\" content=\"I received the following email from trader Angel: Hey Mike! I hope that my email finds you well. I have topic that may benefit some other readers as well. It’s about re-inventing the wheel. Back in april and early may I was trading very well. I had multiple $1,000 days and even a $3,000 day. However, when the volatility increased ... 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