There is an issue that many traders needed help with this week. I saw this need across the board and at many firms, even firms trading different products.
It is a tricky subject with a different answer for different traders. But it just kept coming up this week.
Getting this aspect of your trading right is the difference between struggling and thriving. Let’s get to it.
Do you ever feel like there is a lot of good in your trading, but you just are not making enough? You are good and profitable at a certain trade(s), but it is not enough to pay the bills and/or help you achieve your ultimate goals.
What should you do? This was that issue that kept coming up with the traders I work with inside and outside of our firm.
One trader at another prop firm and in other part of the US reached out for help. He was focusing on one particular setup but was not producing enough PnL. After reviewing his trading, ideas to build from his existing trading strengths, yet expand his PlayBook (the number of types of trades to take), were shared. This trader did and could need to trade more setups.
Another very talented trader, with obvious edge, struggled trading setups outside of his comfort zone. He astutely devised a plans to stick with his favorite trades, as this produces more than enough PnL. Expanding his PlayBook will be addressed smartly at a later date. This trader, at present, will not take trades outside his favorite setups.
One of our top traders, spoke with our new hires about what it takes to become successful (watch here). Responding to a query from a new hire, this top trader shared that he has a large bag of tricks (trades) and determines which ones will work in present market conditions. He has done the work to expand his PlayBook so he can choose the best trades for each market condition. This top trader continues adding trades to his PlayBook and his ability to do so is one reason he is so good.
A junior trader from our desk asked to chat with me after the close on Friday. He was frustrated about being frustrated in real-time with his trading this week. He was trading on tilt and wanted this to stop. He had tackled TLRY mostly this week. To those who traded TLRY this week, I say “WTH is going on in that name?”
I told him I didn’t blame him for being frustrated trading TLRY. There were four backside trades put in this week in this name and ALL didn’t work. The stock has no business trading where it is based on any reasonable standards of valuation. None. But we know the stock will only go down, when the players propping it up are done. And they looked done 4xs this week, and the damn thing unusually reversed. I would find it weird to make all those trades, watch them trade in the money so well, then reverse, and not be a bit peeved by the end of week.
But, but, but this frustration felt by this trader should have been mitigated by all the other opportunity in the market. There were very easy trades in CRON and CGC this week, while hawking TLRY. NIO was a cash machine for active traders yesterday. QTT was a layup. If this trader would have expanded his coverage and added these trades during the week he would have prospered. While I made a few more suggestions, the key issue was not covering more trading opportunities so the TRLY disappointment was mixed with the huge gains from CRON, CGC, QTT, NIO, etc.
A seven-figure international trader has been working with me on expanding his PlayBook. He is so advanced in his A+ setups and wanted to add market bounce trades to his quiver. As an experienced, large money-maker it is easy to expect to trade this new setup with the same size and proficciency as his bread and butter trades. But that is not how it work. That is not how to add trades to your PlayBook. And we talked about that.
Earn the right to trade new setups with size and risk. Start with small amounts of capital. Review the trades. Get your variables for the setup in order. Talk with experienced traders about your trades and get feedback. Tag and measure the trades so you prove your edge. Give yourself time to become proficcient in this new setup.
Also make sure you are sticking to what you do best. 90 percent of your focus could be on your A+ trades. 10 percent of your attention and focus can be on these newer trades, as you are expanding your PlayBook. And again if you cannot focus on trades outside your best, then do not.
*no relevant positions