I was chatting in the hallway at our firm in NYC, with a developing trader who was verbally proud of his improvement on that day.  He was really proud.

I asked him what progress he had made and how.  In detail, he offered his improvement.  When he was done, I asked him to memorialize the improvement in an email to me to further cement a new best practice that added value to his trading.

Below is how this trader improved.

Background – Reviewing my trading, I realized I’m more consistent and can demonstrate edge on 2nd day plays (When I’m involved).  Where I was failing miserably was NOT consistently being involved.

I determined the root cause of this was 100% my behavior, mainly, my inability to focus on said stock because I feared missing out on whatever was in play that day.  An alert would go off maybe, I’d look at it for a minute, then move on only to miss the trade or get shaken out and discouraged.  Ultimately this behavior caused me to miss out on the stock I had edge in, or worse, lose money only to have it do exactly as i suspected it would.

After I missed PEP cleanly trade above 109 to 110.40ish a few weeks back, while I lost money in other names, I realized I can no longer afford to miss these “Layup” trades as I refer to them.  They are nothing more than A++ setups.  They trade clean, they respect levels, they are scalable etc.

Solution – I have an index card on my desk titled “Layup Trade” and it doesn’t have many trades on it.  20 minutes after the market opens, I review the card and review those names and how they are trading relative to VWAP, known levels, etc.  I visualize those trades in the AM prior to trading and review them after the close to determine if they are still valid based on recent price action and/or add a trade to the card.

Execution – I got into the trade today (WMB) prior to reviewing the card, but it was the process of prioritizing trades, visualizing what a successful trade looked like in this name (WMB), and ultimately internalizing that I cannot afford to miss these trades.

I love the solution here.  When we designed our training program at SMB, index cards on your trading station to remind the trader of best trades and best practices was encouraged.  Some use post-its on their screens for the same effect.

It is so easy to lose sight of your best trades when markets open. We trade best, when we trade more of our A+ trades and with more size.  A solution to keep your focused on your best trade opportunities, is one giant step forward for your trading progress.

*no relevant positions