I am very excited for 2017! I feel like I have made significant progress in 2016 toward finding consistency in my trading and I have learned so much. I can’t wait to continue my journey.
2016 was my first full year of trading. I had a lot of ups and downs. But when I look back at the data, I am excited to see the progress I have made. I went from feeling lost to feeling more confident. I moved from relying on others for trading ideas and watchlists to making my own trading plans and executing those plans. I feel that my greatest strength in 2016 was finding consistency with a strategy and my greatest weakness was stubbornness on taking losses. My win % has gone from ~47% to ~85%. My average green day has gone from ~$70 for the first part of the year, up to a consistent ~$900 over the past 6 months. My biggest winning trade this year was $12,682 during the shippers’ craze.
Stubbornness on taking losses took a big bite out of my profits. My average red day was $1,887 for the year. I had 12 days where I let stubbornness get the best of me and took losses greater than my trading rules allow. These few stubborn bag holds really held me back this year and caused my average red day to be so high. The three worst were as follows: MGT in May was my worst loss of the year, -$28,000 (now trading as MGTI on the OTC market after being delisted by NYSE). I got stubborn, held past my stops, added way too much too fast, and was forced out by a margin call on its big red day right before the crack. AKAO in December was my second worse, -$12,947. I went in without a plan, shorted huge just because it was up big, ignored all my rules and got burned. NERV in June was my third worse for -$7,546. These three losses accounted for almost half of my losses for the entire year! It’s a stark reminder how dangerous stubbornness can be. I consider myself lucky that these “market tuition” losses did not take me out of the game and that I was able to bounce back.
In 2017 I really have just one main goal which I feel is evident based on the data above: To become disciplined on taking losses! I need to eliminate the stubbornness. Sure there are other “goals” I have to help improve my trading and hone my skills. Those goals will evolve as I move through 2017. But it is this goal that will stay constant and make me or break me as a trader. It is the single most important thing I can work on right now. It stands to have the biggest impact on my profitability. By reflecting on my performance in 2016, I can see clearly how important this goal is to my future success.
This month I outlined three specific strategy adjustments to help me achieve this goal here. I plan to continue these adjustments into 2017. I said in that post that I would document and report on trades where I failed to follow these adjustments each week. I will continue to do that, though I will save my documentation and report on those at the end of each month with my monthly recap.
I am making a few changes to my trading tools for 2017 as well that I think will help me be quicker on my execution of trades and finding my ideal setups. I am dropping Tradestation for DAS and looking to add a paid scanner such as Tradeideas or Equityfeed. I have been using Tradestation for my main charts during the day and for my scanner. I really liked their platform and level II. The built-in scanner was a huge plus as well. However, their locates are poor and I have found that their scanner misses a lot of the microcap morning gappers. I have been working for a few months on getting more comfortable with the DAS platform and learning how to set it up to my preferences. I finally feel comfortable enough with DAS that I am ready to make the switch. The money I will save from dropping Tradestation will go to pay for my new scanner.
I feel that I have made great progress this year and I look forward to continuing that progress into 2017. I can’t wait to see what 2017 holds as I work on my goal and continue my journey. I am hopeful that my progress in 2017 will allow me to make the transition to where I can comfortably support my family from my trading and leave my “night job” behind.
I hope that my brutal honesty is helpful to those that might read this blog. I write this blog to help me improve as a trader. If someone out there finds it useful, all the better! Here’s to a great 2017!