The Wandering Trader: Answers Lie Within

I’ve been wanderin’ early late
From New York City to the Golden Gate
And it don’t look like
I’ll ever stop my wanderin’

–James Taylor

As traders we want to spot best practices and co-opt them for our trading. I offer one for your trading in this post from a trader on our desk. Let me set the scene.

I have noticed one of our better traders doing better. I pinged the trader with this:

You have clearly taken another step forward with your trading this month. Your better days are larger. You are outperforming others on more days. Your risk/reward seems better. Why do you feel you have made this improvement?

Very well done!

Bella

The trader responded:

These are some things I feel are making a big difference:

1. I am not trying too hard. I am letting things kind of happen without an opinion. That has cut down on frustration and overtrading. Last month I remember a period of two weeks where I was trading frustrated.

2. The big difference is doing a little better job differentiating between the big opportunity versus just another trade. Last month there were a few opportunities that would have changed my month if I had held through instead of overplaying the ranges. I ended up losing money in PLUG when I was short right around the area it broke $1 from. This month I have held LIVE (actually twice) through for a couple days and DHRM when normally I might have been small overnight and had a tough time getting size the next morning.

3. I am trading more true to my style instead of trying to kind of step out of myself to match other people’s results. I should have done better with the (marijuana) stocks last month but I also did a dumb job of getting big in situations because others were and I had a fear of missing out (FOMO). This month I am going more to my speed in my setups.

This trader looked inside of his trading and found the good and did more of it. This is not a search for improvement by looking at the strategies of someone else who makes more money. This is a look inward for outperformance.

Yes, we should always search for new edges in the market to exploit. Yes, we should step outside our comfort zone to try and add new strategies. But often I find traders searching—no, wandering—for an answer to their improvement elsewhere. Some lack the confidence to trust the good in their trading and do more of it. Others do not have the sustained energy to keep working at their own game. Many others do not even know what they do best as traders. But first we must be able to improve our own trading game from our own best trades!

I ask the underperforming drifters who go from one holy grail strategy to another this one question: if you cannot first get better by making more from your best trades, then how do you expect to improve learning someone else’s?