I have to admit, a few weeks ago I felt like the wheels fell off with my equity trading. I was attempting to make changes to the way I take my plays attempting to have a major breakthrough, instead I had a breakdown. Once you have a profitable, workable plan, stick with it. Minor changes could have big results either way, in my case it went the wrong way. I’ve recovered, went back to what has been working and I’ve been focusing on items in my plan that I’ve not been doing enough of such as adding shares back and reducing my stops. I’ve decided that adding and reducing needs to be a priority on every play. This is how a trader will learn to build into big size properly and have the ability to take a small share size and make big money. Caution here, you can only add and reduce if the play is going in the correct direction, attempting to move price or add to plays in the wrong direction will always end in grief and frustration. In order to reduce your stop means that you have to have a profitable position which allows you to buy more shares which will move your price, but keep price just above your stop when adding.
I’ve also looked at my plan to see what I’m not doing or not taking more advantage of and one of these are reversal times. Reversal time are 9:35, 10:00, 10:30, 11:15, 12:00, 1:30 2:15, 3:00 and 3:30. At these times the market can and usually does, start a move or end it. If you look at previous days 5 minute charts and draw a line down the chart at 10:00 am and 10:30 am you will notice that the market usually sets the high and the low, for the day, between these time frames about 80% of the time, give or take 10 minutes. If you can align your trades with these time frames you will see your trading take off to new levels of profitability. Your odds of a successful trade greatly increase if taken at a Reversal time.
The last item that I had gotten away from was doing my homework the night before. I always go through my stock universe daily, but I was not doing my analysis on the market as often. I’ve notice that my trading becomes mastery when I do my homework everyday. The habit of going over the QQQ daily and coming up with my morning market plays is my guarantee of having a successful trading week and should not be taken lightly. Hint, every day trader should be doing this, this is the real reason behind my blog, it gives me somewhere to write it down, internalize it = Mastery.
My week went boringly well, nothing to show for Friday just 4-5 trades attempted, nothing but small gains, and at the end of the day Friday I was happy, up 1 Risk unit and I’ve been profitable everyday this week and I’ve had only one losing day in 2 weeks. A little adds up quickly and every once in a while you will have that OMG play that will make your month. Keep Trading!
