Broad Market Outlook
At the beginning of the month, I am often spending a portion of my time on the phone with the members who actively update their trading journals looking to spot mistakes and focus on tasks to improve on for the month ahead.
As a result of this, I too, need to hold myself accountable and complete said tasks to find my own blind spots and work on getting rid of those mistakes.
After doing my own trade review, I noticed two glaring problems.
1. Raising my stops too aggressively
2. Not keeping an eye on recently close trades for possible re entry
Regarding my stops, I had about a dozen swing trades that I closed out last month, had I kept the original stop (the pivot low at the time of entry), 8 of the 12 trades were at my price or higher (some much higher) while 4 of them would have failed resulting in a bigger percentage loss then the one I incurred. As a result, by simply following the original game plan, I would have made more while doing less.
Now in hindsight, it is easy to see this and say it, yet in the moment, it can feel like a different story. We can say just give SNAP the room vs $59, yet when it sells off 6% in a day, it might not be as easy to stomach it. When in reality its the right dose of medicine.
CMG was a perfect example of both of these glaring problems.
When I first got into CMG the plan was simple, buy up through $1360 vs the pivot low of $1280. However over the next few days, it did not do much and I raised the stop close to break even and lost less then half a percent. Giving away a 20% winner as it marched right towards my target.
The part 2 of this mistake was moving on from the name.
After I got out, sure the name did trade lower, yet it never technically failed the original plan, more importantly it formed a higher pivot low and set up for the same trade again with even less risk that was legitimately defined.
But since I was no longer watching it, it quickly drifted 20% higher with ease. If you have been trading long enough, this has happened to us all.
We spend all that time and effort hawking a set up, only to move on at the first sign of something other then what we hoped for. Getting back on the treadmill trying to find a new set up when there is still one in front of us.
Going over other members trade reviews, this too, came up, where the first trade failed, yet the level was still one worth buying in time.
A simple way to remember these re entry trades, are as simple as right clicking our mouse on trading view and clicking "add alert" near that major level.
The key part of this is that it may take weeks and even months for that failed level to really be ready, and we can basically forget about it until that alert goes off.
My goal for the month ahead will be to focus on keeping the original game plan and setting more alerts on trades that I exit near there breakout levels to take advantage of them next time.
What are your 2 major lessons learned from your trades last month?
From Ben G
Macro Rotation Outlook