I haven’t hid the fact that 2023 hasn’t been my best year of trading. (The first half of the year was particularly difficult for me…)
But I didn’t get discouraged and let my losses destroy my confidence…
Rather, I went back to the basics to identify the mistakes I had been making.
And recently, my hard work and self-reflection has been paying off…
Last week, I nailed two killer trades in the span of three days.
But I never would’ve profited on these plays had I not stuck to my rules and traded my game plan.
Specifically, I’ve been focusing on sticking to certain trading rules that have helped me turn my performance around.
So, if you’re struggling with your own trading, look no further…
Keep reading and I’ll show you the four pillars of my trading comeback…
Watching Charts Closely
Throughout my 10+ years as a professional trader, few exercises have been more valuable than simply watching charts.
Not trading … watching.
It might sound boring, but watching charts is one of the best things an aspiring trader can do.
Doing so teaches you the personality of stocks, the art of technical analysis, and the critical indicators that can help you develop your ultimate trading strategy.
SPOILER ALERT: If I hadn’t identified and watched the right charts last week, I never would’ve made my winning trades.
So, when you’re watching charts this week, ask yourself the following questions:
- What price level(s) does the stock tend to trade above (support)?
- What price level(s) does the stock tend to trade below (resistance)?
- How does the daily trading volume correspond with the price action?
- How does the chart react when the share price nears the VWAP, 50-day moving average (DMA), or 200 DMA?
- Is the chart potentially nearing a first red day or first green day?
Then, once you’ve gotten a firm grasp on eyeing your charts, it’s time to look inward…
My first piece of advice is to avoid overtrading at all costs.
For some reason, a lot of traders feel the need to make a trade every single day.
But I’ve never understood this. The stock market is constantly changing…
If they’re sticking to a consistent strategy, how are they finding excellent setups to trade every day?
The answer is … they aren’t. They’re likely overtrading. In reality, even in bullish markets, finding five-star setups is rare.
It’s important to remain patient during periods when good setups are hard to come by. Then, act aggressively when the ideal trades do appear. (Remember “the 3 Ps!”)
Overtrading can potentially lead to some of the worst trades in your career, as it can be mentally taxing and cloud your judgment.
While it’s natural to want to grow your account in a fast-paced market, it’s important to avoid spreading yourself too thin.
Think about this…
If you don’t make any trades over the next week, your account will be intact. You may not make a fortune, but you won’t lose a cent either.
My advice? Size down, focus on the best setups only, and avoid FOMO at all costs.
When there are no excellent plays available, exercise patience and wait like a zen master.
However, when the right setups arise, act quickly and decisively, like a samurai warrior.
And luckily, there’s a simple way to help avoid the temptation to overtrade…
Paying Attention to The Big Picture
If you fail to follow the big picture, it could lead you to making costly trading mistakes.
Here are a few examples of what not to do…
- Letting small signs of a potential breakout (or breakdown) scare you out of a winning play…
- Only watching charts with shorter time frames (when you should be paying more attention to the daily and weekly charts)…
- Allowing market volatility to shake you out of your gut instincts.
The stock market will constantly try to fake you out of your conviction. Don’t let it succeed.
Your immediate reactions can occasionally overtake your big-picture trading mindset. Anyone who day trades should be able to relate to this.
But allowing this to happen is a mistake.
There’s usually way more to gain from sticking to your initial conviction than in allowing short-term trading signals to veer you away from your overall plan (more on this later)…
And one more thing … If you sell a position too early, don’t fall into the trap of counting the gains you could’ve had. (That trade is over … move on!)
Keep your mind on the big picture. NEVER let minor hiccups distract you from major indicators.
Trusting My Gut
Great traders have a ‘sixth sense’ of sorts. They have a knack for making the right moves, regardless of what the rest of the market is doing.
In other words, they trust their gut.
A lot of this comes down to experience and time in the markets.
But even some of the most well-seasoned professionals can have trouble putting their money on the table when they have a strong conviction.
I’m not suggesting that you make wild bets this week in an attempt to trust your gut. Quite the opposite…
Instead, take this time to meditate on what your gut is feeling. Pay attention to the way you’re learning. Make notes.
Then, after a few more days of crazy market action, check back and see if your conviction was correct.
Don’t force it. Be patient and wait for your gut to send you signals.
Remember that having confidence in your conviction comes with experience.
And speaking of experience, today is your last chance to get access to one of the most well-seasoned traders I know…
Are You Ready To Level Up Your Trading Game?
Here’s the truth … I wouldn’t be a multi-millionaire if I hadn’t joined Tim Sykes’ Trading Challenge so many years ago.
And I want you armed with all of the tools necessary for success in the stock market.
So, if you’re passionate and dedicated, ready to take on anything the market throws at you, then I’ve got something for you…
My mentor, Tim Sykes, has helped traders learn to succeed for years. More than 30 of them (including me) are now millionaires.
Are you ready to take your trading game to the next level? Do you have what it takes to face the Trading Challenge?
Let’s find out…
I’m excited to see you there!