By no means take what you are about to read as expert advice, I am now officially 6 months into my journey as a full time trader with many years deep as a successful swing/intermittent day trader. These are just my eye opening thoughts as of late that I am spilling out into my own little piece of internet universe.
My success thus far has exceeded my own expectations but it hasn’t been without some thoughtful moments on reckless behavior. I think one thing to keep in mind when stepping back and looking at our current market state, we have to remember that this market has had one direction with few exceptions in the past 8 years: UP. Most bull markets tend to last for half that time. So, to find success merely by being able to buy during frenetic market states one could argue could simply be attributed to luck and current market conditions. That being said, risk management is always something that will separate the pro from the novice players in the market.
My focus since becoming a full time trader has been one thing: ending each day green. To aim for a certain dollar amount is absolutely ludicrous, I learned pretty quickly that you have to take what the market gives you. Transitioning from a consistent paycheck to one that is anything but consistent can be a bit rocky and challenging to grasp, but when you start making in a day (or an hour!) what you made in a month at a full time job it really opens one’s eyes. The market is truly a gift to those that are patient. I have found that when I am most calm…when I wait for the trades to come to me….I have THE MOST SUCCESS. When I am searching frantically for trades, I end up overtrading and generally lose. Seems pretty logical, right? It is until you are behind the wheel driving. Trust me when I say that waiting for the trade to show itself to you will reward you beyond what you can imagine. Forcing anything tends to result in failure. It is not to say that your method is not right, it could just be your timing. Analyzing your trading from every angle is THE most beneficial thing you can do for your trading business. I used to live in excel, so analzying my trading has always been part of my business. It was pretty eye-opening what my perceptions were of my trading vs. reality! I love this part of the business that is black and white!
One of my larger trades today was $BABA. My goodness, I adore this ticker. I just looked at my history of this ticker and I am 85% on this one. Seriously unreal. Anyway, I have been trading this one on the long side for the past week, both from the swing side and intraday. I knew it was due for a pullback so I pulled out of my swing yesterday and waited to see what would happen on a pullback. The ticker is near all time highs so it would not be a surprise to see a huge rip to the upside given the current market but I do not have a crystal ball so I needed confirmation. I was also not confident in how far it would pull back, so I decided I would wait for the bounce play. Below is how I traded it. Overall, I am very happy with how this played out. While I don’t have it included on this chart, I added on 20 sma touchpoints and kept moving my stop underneath the support bases created. Managing risk is the number one job of any trader…it truly can make or break you. This trade resulted in an average of a $2.50/share profit.
These types of opportunities exist in the market every single day. What matters is your patience on waiting for them to present themselves. Continuing to practice patience and having confidence in the fact that opportunity is always there is my focus.