After a rough week and a half of trading November is turning out to be a very difficult month to trade (at least for this developing trader). When an individual knows what to look for, how to act upon what she sees, and then is able to see it through and capitalize on it, one basically knows how to trade and needs to focus on developing skills and expertise in those skills.
One very important thing that a developing trader needs to be able to identify is when to pull back and just simply refocus. My criteria for knowing when I need to pull back and refocus are:
1. More loosing trades within a day than is my normal or average and more days that this happens.
2. Being engilfed in the feeling that others are making money and I am not.
3. Trading a trending day like a range bound day.
4. Being nervous about positions.
5. Skipping from chart to chart.
6. Knowing what should happen and then rarely seeing it unfold in comparison to a good month.
7. Feelings of frustration that sounds like, “This worked before why not now?”
8. Feeling like you just want to kick your dog for no apparant reason (of course not really doing it).
9. Noticing that a trend seems like a long lost friend who abandoned you and you are left empty asking why.
10. Your P/L leaves much to be desired and you know that there is no reason, except for yourself, that your P/L is what it is. Basically you are left feeling disappointed in yourself.
What is important, once one knows that all the criteria for a difficult month are staring one right in the face, is that one recognizes and does the following…….
PULLS BACK & REFOCUSES
I have come to realize that when the top ten items happen, which used to be devastating to this developing trader, I simply pullback and refocus by doing the following. As these have become a part of my plan. Pulling back, to me, means….
1. Going back to a lot of watching and sitting on my hands in wait for a trending day and/or a trending stock when most all variables (that make a great trading day) add up. For example, extreme tick readings, trending vix, momentum in the direction of the trend in market and stock, all indices making higher highs or lower lows, nice volume, and orderflow that just screams “find a spot to enter you dummy”.
2. It also means focusing a lot on my “pet” stock and perhaps trading it exclusively. This way I am able to capture momentum moves on range bound days.
3. It means having an intense focus on finding “the” move when it decides to happen and capitalizing on it with the appropriate share size.
4. It measn that my average total shares traded on a day or in a week is cut way down.
All of the above helps this developing trader to refocus and capitalize on what little the market has to give at times or in times when the market seems a little Bi Polar and is basically difficult to read much of the time.
Profitable Trading ALL!
Debbie
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