One of our young traders did a nice job today of rebuilding his confidence. He started off the month of August on fire seemingly unable to have a negative day. His confidence grew and he began to take on more risk. I noticed that when he had his first negative day of the month that he overtraded a bit in an attempt to get positive for the day. What trader hasn’t done that before 🙂 . Over the course of the next couple of weeks he overtraded a few more times and gave back a good chunk of his monthly profits.

Today, he drew a line in the sand with respect to his trading behavior. One, he decided that he would only focus on the most In Play stock of the day. And two, he would only take trades with very favorable risk/reward (greater than 1:5). I am happy to announce that he put together a very nice day with a ticket average of around 70.

We were chatting after the close about the trades that he made and whether there were areas he could have improved upon. This type of post-game analysis is very important and should not be confused with second-guessing oneself or playing Monday-morning quarterback. The crux of your analysis should be related to sound trading rules that you have established for yourself and whether you executed on these rules correctly.

And for those who are curious as to what he traded, check out this link.