Prop Training Section 5 - Eliminate the which doesn't work

"…deliver me from the man who never makes a mistake, and also from the man who makes the same mistake twice." Dr. William J. Mayo

Eliminate that Which Doesn’t Work for You

New traders must eliminate that which doesn’t work for them. Every trader is different. We all have different skill levels, tolerance for risk, goals, ability to process data, interests, mental agility, etc. We should all trade uniquely. Our fundamentals and techniques might be similar, but you must put your own fingerprints on your trading. You must determine what works for you. Do more of what work for you. And eliminate that which doesn’t work for you.

For example, find the stocks that don’t work for you and eliminate them. I don’t trade the oil stocks or the home builders well, so I do not trade them. I don’t like trading stocks above $100, so I rarely trade them. Find the volume in stocks that doesn’t work for you and eliminate them. I do not trade stocks with volume above 8 million shares per day well, so I don’t trade them. Find the tier sizes that do not work for you and change them. I do not trade well with a lot size over 700 shares in this market. So I do not trade with lots of 1000 shares. Find the styles that do not work for you and eliminate them. Discover the strategies that do not work for you and eliminate them.

I have been negative one month in the last three years. Why was I negative that month? Partly because we were trading at a firm that was experiencing technical problems. But it was mostly because I was trading the wrong stocks. YHOO and AMZN were extremely thick this month. And they had news. And I became a little obsessed with them. And I just wasn’t making money. And wrote a ton of tickets. I never really lost any money. I just churned and churned and all those tickets became expensive. Ripper! I ended up slightly negative for the month. My streak of positive months ended. But it was my fault. And the next month I got out of YHOO and AMZN and back into stocks that I could make money in. And had another profitable month. Chop Bella!

Intraday, after the Close and over the weekend find some time to just sit and think. Think about what is not working for you and eliminate it. Find the stocks that you trade best, with the comfortable tier size, and the right amount of volume and focus on those plays. Focus on what you do well and hide your weaknesses.

Eliminate your mistakes. You have been taught “Our Fundamentals”, and trading rules. You will make mistakes. Recognize them and eliminate them from your trading. Sit and think about what mistakes you are making. And then rid them from your trading. You can become the next great trader on the Street. We will provide you with all the tools you need. We will provide you with everything you need to learn. We will provide you with all the capital you require. However, to become a successful trader you must eliminate that which doesn’t work for you. You must focus on what you do well and maximize your strengths.

SUMMARY

1) What stocks do you trade well?
2) What tier size is best for you?
3) What volume works best for you?
4) What stocks do you trade poorly?