There is one thing you have to get right at the start, developing stage, and apex of your trading career.  Some think getting this one thing right it is optional.  There is other work waiting for them.  Others fight its necessity to the frustration of those who run trading firms.  Those traders either get onboard or are transitioned out.  Still others embrace it is essential.  These traders learn their trading potential.

If you cannot solve this trading issue, then you will need to look for new work, as I explain in this video.

The most common question I am asked during a trading presention is how to fix their failure to adhere to trading stops.  This was the first question I fielded during a presentation at the Chicago TradersExpo this week.  I offer some solutions in this video.

New traders at our firm immediately meet our risk manager if they exceed their stop losses.  He even walks the floor checking in on the newbs and their stops.  Traders grow from a start of honoring stop losses.

Developing traders meet the risk manager if they exceed their stop losses.  As they get bigger, traders grow honoring stop losses.  It is more common for firm coaches to push traders to take on more risk than field meetings about exceeding risk.

You are not scalable if you do not trade within stop losses (we also say guardrails).  You are susceptible to blow up without trading within guardrails.  Think KBIO.  Think DRYS.  Think VRX.  Think AWX.

Some firms view stop losses exceeded as an ethical lapse by the trader.   It can be seen as black and white as a trader stealing from the firm.  In a closed door meeting, with trading management, a spirited trader we work with judged such behavior as “criminal”. These traders do not have the authority to lose more than their stop loss on a trade.  Additional losses are not much different than breaking into the firm safe and looting its cash reserves.

The work on adhering to stop losses continues for even the winning traders. One large trader, with whom I work, noticed outsized losses midday after successive losses.  He added a technique to limit these losses propelling improved trading for an already successful trader.

Another Black Shirt trader, at our firm, has made excellent progress in 2018 losing less on the front side by setting stricter stop losses.  One international experienced trader is working on stricter stops for overnight positions.  Another experienced trader for after hours trades.  The work continues.  The need for stop losses endures.

*no relevant positions