September 10, 2014

Key Lessons After Coming Back to Trading

I've consistently executed good trades since coming back to trading in early August 2014. Here is a snapshot of my cumulative return so far:


That's a pretty decent stair-step-like progress chart if I do say so myself! I'm not used to this type of steady progress, so it's quite refreshing. In fact, I've never had such a good positive-to-negative period ratio--I.E., green trades versus red trades:



So I took some time to go over my trades and take note of the key things I'm doing for each trade that help tilt the probabilities of a successful trade into my favor. Here is a list--in descending order--of the most important rules/steps that are having the most positive impact on my trading:
  1. Identifying and focusing ONLY on the best daily chart set ups
  2. Using a position size that ensures I'm 100% comfortable with the dollar loss if I stop out on the trade
  3. Identifying a good entry price, a comfortable stop out price that still reflects the chart, not just my emotional stop out price, and a price target BEFORE entering into a trade
  4. Sticking to the original plan, unless the price action behaves in a way that I did not predict or expect to see
These four key steps really stood out to me as the key drivers behind my decent trading streak. I'm glad I took the time to review my trades because these steps seem so easy and obvious in hindsight; however, my trading last year and early this year was mostly devoid of these steps--and as a result, so was my consistency and profitability.

Anyway, I hope you enjoyed the post!

'Till next time,

Jory

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