For those who don't know me I was a millionaire challenge student back in 2015 and fell flat on my face as I tried to jump into trading way too quick. You can read about that here: https://profit.ly/user/BUFFALOish/blog/how-to-not-succeed-in-the-millionaire-trading-challenge-and-how-i-plan-to-improve-in-2016
Well due to a new job and life in general, 2016 became 2019 but after listening to Tim and Steven on the steady trade podcast for the past year I decided to make the comeback to trading.
After painfully reviewing all my trading logs I reviewed each and every note I took during my short time as a student before stopped trading.
I had over 50+ pages of notes but these ones stuck out to me the most because had a I followed and listened to my own takeaways I would have probably been a success instead of a failure.
I wanted to put myself through this review to make me a better trader, post it publicly so anyone could call my out if I lost my discipline again and go against all this, and hopefully help others who are just starting out.
Here the highlights of my review:
DON’T LEARN TO DRIVE A CAR BY SKIPPING STOP LIGHTS AND STOP SIGNS AND SAYING IT ISN’T FOR YOU.
Think of trading as not something that you need, but something that comes along once in awhile that you want to partake in
DO NOT PUT YOUR MONEY IN ANYTHING YOU DO NOT HAVE A PLAN FOR. Just like don’t point your gun at something you dont plan to kill
remember trading is not always about getting the biggest profit, when you have a tiny account, your #1 focus should be building it SAFELY so you can take bigger, bolder positions later on.
Don’t use market orders. Do limits and stops.
ALWAYS CHOOSE A POSITION SIZE THAT WILL NOT END YOUR TRADING CAREER...IF IT’S MAKING YOU SWEAT IT’S TOO BIG, DOWNSIZE AND STAY COMFORTABLE.
DON’T BE A SCALPER! SCALPERS WORRY ABOUT TRADING FEES! GO FOR MOBY DICK! BE A BIG GAME HUNTER WITH AK47 NOT A BBGUN. DON’T SCALP! PLAY MULTI DAY MOVES NOT INTRADAY LOSES!
TAKE LOSSES WHEN THEY ARE SMALL. LIVE TO PLAY ANOTHER DAY
Pretend you have haters, it’ll make you a safer trader
DO OR NOT DO...THERE IS NO TRY
Sometimes the stock will go the way you wanted it too immediately after cutting losses quickly...that’s the way it is and happens and can happen 50% of the time. THAT’S JUST THE WAY IT IS.
You can wait after a stock breakouts to play it. don’t feel like are missing by missing the spike on first day. Play earnings winners after they prove themselves (sometimes multi day)
COME OUT OF RETIREMENT TO TRADE, OVERTRADING LOSES YOU MONEY!
Look at volume, float, news, resistance, support when researching stock. that’s it
Be flexible with buy and sell points. know that resistance and support can flex .10 or so
have ZERO expectations, dont set $ goals, % goals for the year.
The WORST thing you can do is trade to try to get your money back. Trade because it’s a good setup not get revenge.
BETTER TO MISS A TRADE THEN TO MAKE A BAD ONE!
Skip a trade if you don’t feel completley comforterable.
You are going to miss good trades. The important thing is to miss the bad ones and concentrate on the good ones when you can.
If there are more than one good play: BREATH (Don’t lose money by rushing in). Focus on the trade you are prepared for instead of the riskier less predictable one.
You have to make a risk to play. You will have a lot of small losses but these are necessary in order to make big gains. Without small losses you will not make big gains. Just make sure to have your stop loss set and CLQ.
UNTIL YOU ARE EXPERIENCED LOOK FOR 3-4 TRADES A MONTH THAT ARE A MUST BUY! (TOTAL CONFIDENCE IN TRADE)
Only invest as much as you are willing to lose (like a casino)
Small Gains at a time $100-$1000 a trade not 1 million overnight
Accept that your won’t get paid daily, weekly or even monthly, just take it one trade at a time when the best setups do present themselves.
Be able to go both long AND short, you don’t have to be bullish all the time like too many people mistakenly believe
A market cap between $10 million dollars and $500 million. This one is flexible based on your trading rules and preferences, but this is a pretty good starting place. If you’re getting too many hits on the lower end (or too many illiquid stocks), try bringing your bottom parameter up to $50 million dollars. If you aren’t getting enough, increase your upper limit to $250 million dollars or just leave your screen uncapped.
Some months, you make $20,000 dollars. Some months, you make $500 dollars. Other months, you won’t make anything. There are times where I haven’t traded anything for 3 months at a time, just because there aren’t any good opportunities. That’s how you have to think of things. You have to say, “Wait a minute—there isn’t anything good here.” Trading is all psychological, so when you create these opportunities in your head, they’re usually pretty wrong and they’re not worth exploring.
DO NOT TRADE WITH LARGE SIZE UNTIL YOU ARE CONSISTENTLY PROFITABLE. If for any reason you think there is a good
Trade but you don't want to get in it, make the trade a LOT smaller.
Use premarket-afterhours as a guide for what stocks are in play (not for resistance and support levels)
“THE BEST LEARNING TOOL IS YOUR MISTAKES” AND THE TIME YOU SPEND IN FRONT OF THE MARKET AND THE SCREEN MAKING YOUR OWN TRADES - Tim Gritanni
Your level of success depends totally on your commitment.