Month by Month Overview
January
- Honestly underwhelmed looking back on my monthly review. It is crazy how much improvement can take place within ~ 11 months. At this point in the year I was still trading a losing strategy, had lots of holes in my psychology resulting from that, and hadn’t yet developed a true edge in the markets. I still needed to establish a better process and consistent peak performance routine.
- Biggest takeaway from the month is the necessity of routines and habits that increase your aptitude for peak performances, as well as the frequency of such experiences.
- Biggest improvement from the month was taking cold showers in the morning to get rid of ‘brain fog’
February
- This monthly review reflects that I am starting to get more specific with the processes that are fundamental to success: “I want to know how I am going to operate each day and writing the processes and best practices etc. really helps me know how to operate and build conviction in my trading ability.”
- It has certainly been my experience that defining and describing the important components of a process or system leads to more clarity in real time. First, because it will result in us without a doubt knowing what we are trying to be conscious of and thus building on the original technique Lance described (staying conscious in real time) and making it even better.
- 2.10.23: “What I think about is the long run expectancy of my a.) strategy b.) mindset, mental capital c.) I need to know whether my poor results are coming from my mindset, lack of edge, or failure to effectively implement that edge… they are not mutually exclusive. I thought this excerpt was particularly profound and still rings true. Anytime I am confronted with frustration in the market place, the first step is to gather an understanding as to whether the source of the problem is originating from a.) flaws / holes in my process or systems, or b.) flaws in my trading psychology, and as I noted they are not mutually exclusive; psychological problems can result from a system that has no edge, and you can spend a ton of time trying to “fix yourself”, when in reality, your system does not have long term positive expected value.
- This monthly review is 100% more detailed than January’s, which makes me happy. Still trading a losing options system have not yet made the switch to equity.
- Biggest improvement from this month looks to be the found in the work put in to define and describe the ideal Mindset, what my Edge (potentially is), and further cement my Preparation & Review process. This also speaks to the benefit of curating / filtering the information you take in from outside sources, and ensuring they fit your style, mindset, process etc. , as I got the idea from another trader who openly shared his work on Twitter.
March
- In my monthly review of March I noted that communicating with my pod members and other like-minded traders on Twitter led to growth, and doing so helps me learn; when one teaches, two learn + the sense of community you get from both a close team and a broad community is beneficial. Looking at my trades, I have yet to make the change from options to equity and my stock selection and trade strategies are largely lacking.
- This month I also went to Arizona with my family for a week which was an awesome trip. I read Reminisces of a Stock Operator which was inspiring and did a bunch of push-ups which was good for the mental and physical (Arizona Trip). Time away from your normal environment is so beneficial to detaching and getting a fresh perspective on life and your mission. I brought David Goggins book too which is a good read, he is definitely one of my role models.
- Things are not really clicking yet in my trading.
April
- I have still yet to hit on my edge in the markets. Reflected in my monthly review is the absence of processes to identify which stocks I want to be trading and why. My focus is still on making $ and lacking a deep understanding of what my potential edge is in the markets.
- Despite that however my bobble head most definitely moved higher: “As written above I still had a great month in regard to my health, physique, spirituality, and relationships, which all contribute to my baseline performance. this is the easiest part for me it feels like. I just need to keep working on my edge in markets and superior r/r trades. and my psychology still needs work (going to order trading psychology by Brett sooner than later, already have a book on performance on the way)” – Still lots of work to do but it seems I know which direction to follow.
- This month also reflects the importance of consistent, structured process in your trading. Best practices are foundational.
- First mention of switching to equity from options.
May
- 5 months into 2023 and I see this month as the turning point in the year. “One thing that stands out to me right away is how much better suited I am to trading equity intra-day versus options. Trading has to be tailored to your strengths.” – the options market is not a favorable learning environment for developing traders. Options should only be utilized once edge is established and long term positive expectancy is proven, to leverage your bets on your best setups that you truly want to maximize. I could not possibly learn proper entry, management, and exit strategies while trading options without an edge or refined processes to put on, exit, and manage those trades. Also I was attracted to options because of the $ and it is very difficult for a developing trader to develop properly in those conditions, and not base decisions on money or other irrelevant factors (noise)
- Starting to get a much better grasp on the concepts and principles that have led to success (“Understand a trade usually starts from a daily pattern, the execution happens on an intraday basis. You are trading the daily expectation through the intra-day structure” + starting to prepare my ideas better and execute on them).
- This month I went to Traders4ACause in Chicago and I think that definitely contributed to this being the turning point in the year. I was able to meet two of my role models, Mike and Lance, as well as other young traders and started to build relationships with Alex who has been a great friend and helping me with the process of starting my career in the prop world.
- Daily reviews reflect that I am starting to get a better grasp on the catalyst trades (stock selection) and my management is much improved since switching to equity from options. Good amount of high quality Playbooks this month.
July
Trust yourself
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September
- In the last quarter of the year I feel that I really started to gain some momentum in my trading after being consistent in the application of the best practices that were of the utmost importance to establish. Executing them with consistency is going to make you better over time. At this point in the year my review reflects that I have a much better grasp and understanding of what is necessary and fundamental to operating a trading business. Because in reality that’s what it is. This is not a hobby, not something I do for fun (although I do thoroughly enjoy it), I am here to get better and to extract large sums of dollars from the market over time. In order to have the ability to do so, trading must be viewed through the lens of a business operation. Years of education and consistency in process and mindset is the prerequisite for that skill.
- I remember around this time being to focused in on the chart setups, and neglected the dynamic variables that often make a chart setup worth taking or not. Those dynamic variables being: RVOL, volume, price action, market tailwinds, and the level two. These variables are constantly changing and altering the EV behind your trade decisions at any moment. I do not want to be taking trades that do not have confirmation from price action + volume, the level two, and ideally you want the market tailwinds at your back. I feel that these variables (as well as the more static, constant ones, like a daily setup or a catalyst) are what contribute to the EV behind a trade and therefore it is of the utmost importance to listen to the information they are communicating to you.
- Pre-flop variables: daily chart, catalyst, market sentiment + technical conditions, PM structure
- Post-flop variables: (constantly changing, a trader gets much more information that informs the degree of EV behind an opportunity after the open) RVOL, volume, price action, market tailwinds, and the level two
- This month I also noted that I improved my morning frames and being more specific about the input variables that go into then and contribute to the edge / EV behind the setup (all part of proper preparation).
- With only three months left in the year at this point, I doubled down on the goals I started the year with. And a lot of that is revolved around making it explicitly clear through writing and reflection what the foundations of a prosperous career are, and the best practices that will carry me the distance and lead to me getting better in all areas of life over time.
- “I have everything I need to succeed, it is all on me, to do the work and believe in myself. Let’s keep getting better and growing in all areas of life”
Reflected here is the exact concept I previously described of always aiming to refine your best practices over time, in an effort to make them more elaborate. Refined my weekly and daily review process. Also improved the best practices by defining and describing them in a separate note that I will share independently.
October
- One of the biggest lessons of the year that showed up again in this monthly review was that of maximizing when the odds are in your favor. So I know for sure I will structure that into my 2024 goals.
- Another big lesson from this month that has had a profound impact on my trading overall is the concept of buying on the pull-back rather than the breakout. Although at the service it is a very vanilla, common saying, I think it goes deeper than that. Trading is all about maximizing when the odds are stacked in your favor, and over the long run I want to be expressing my ideas in the most efficient and r/r favorable way possible. I will buy breakouts if the setup is there, but this lesson was more so about getting a better understanding of how markets operate. There is a specific time and place for each tactic, but the key takeaway is that you must structure your trades as to maximize the upside potential pay off and limit the downside risk.
November
- This month I made great progress both psychologically and tactically. I have discussed elsewhere that I missed some big capturable opportunities this year, and how that was the result of a bit of me getting in my own way with limiting beliefs but also because I had not put in the time to build out the Playbook or strategies to capture the big opps that I was upset about missing. It sure took me long enough… this points to the importance of being proactive about experiences in the market that frustrate us and reflecting on why that is the case and then building our systems and habits to reduce the frequency of that frustration. I addressed the problem on two fronts. For the psychological side of the issue I added in meditation / visualization into my morning mindfulness time, aiming to cultivate belief in myself and my abilities. On the tactical trading side of the problem, I realized that it was quite dumb of me to expect to capture these moves when I had no examples or framework to worth with / learn from. So, I started reverse engineering some of the type of moves I was aiming to capture and building systems around those. Then it was all about getting reps in (with lower size) when the opportunities popped up. This also led the realization that markets are fractal in nature; the same tactics and strategies I employed in my day trading could be utilized on a higher time frame.
- Refining my edge: I also spent a lot of the month working on cementing the edge I spent the year building into a Note that defines and describes the layered components of the Playbook (Catalyst Day 1 Momentum), which I am proud to have completed. For me defining and describing the components of my trading business is very beneficial so that is a good thing to know about myself and I want to continue pursuing that method of internalizing trading strategies and concepts.
- Trader style: Similar to how it is important to internalize ideal trading strategies and concepts, it is even more important to make it clear to yourself the style of trading that is best suited for you. One thing that I have discovered into the year end it that a style is more of an overarching term that encompasses the various Playbooks a trader has in his arsenal. For me at the moment that is: catalyst trades (both day and swing), market structure trades, and easy money trades. “All facets of the business should be in unison; tactics and strategies should draw upon each other. The market is fractal in nature: momentum strategies can be used in easy money trades and market structure plays alike. Easy money trades and market structure trades focus on the same principles and setups in highly liquid, beta stocks.” – I see this principle as still a bit underdeveloped but I feel that I am on to something with this.
- Trader identity: A foundational principle at work here.“In order to become the person / trader I want to become, it is necessary to first conceptualize what that ideal would think and act like, and then using all your consciousness each day to be that person” also see: (Sitting with trader identity)
"Whether one succeeds at this job and the degree of success comes down to one thing: the degree a trader is able to identify the areas of their trading that will provide the best ROI of their time, analyze how to improve in these areas, and then actually execute in improving day-to-day"
Can you distill the year into a few key themes that if improved upon would drastically improve your trading?
- Need to work on the skill of objectively and accurately evaluating the quality of opportunity before me.
- Reduce the frequency of the random low quality trades as much as possible (both of these have to do with stock selection at least at some level)
- Both of the above bullet points will be addressed through my 2024 trading goals as I feel that implementing best practices / structure into my routine to resolve these issues is one of the highest ROI focuses heading into the new year.
- In line with the point above, consistency with my trading is going to again be a main focus of the new year. I feel that this year I established consistency in process and mindset (of course still room for improvement and refining) and I want that growth to reflect in consistency in taking high quality trades and only executing within my Playbook. There is a time for experimenting when you are developing as a trader, but I feel that I am well past that stage and want to execute trades consistently that fit my Playbook.
What led to the most growth? How can you double down on this area?
- Establishing best practices and being consistent with them | Best Practices
- The theme of best practices is found everywhere throughout this review. I do indeed believe they are the life of a trading business and without them a trader has nothing to rely on. The most impactful best practices for me would have to be those structured around review, preparation, and performance (these are of course very encompassing terms in this context).
Review
- The DRC is one of those habits that is going to move the needle so long as they are rich in detail, specific, and executed specifically. So, one way I can double down on this best practice is by continuing to be intentional with my daily reviews, and always aiming to extract all the lessons from the day to the fullest. I did not miss any DRCs so I do not feel the need to go into a system for this double down goal.
- Towards the start of the last quarter of the year I started to get consistent with my weekly reviews. I left a lot of room for improvement on the table by not doing those this year and that is not something I am okay with. What I love about when I started being consistent with my weekly reviews is my guy Neel did the exact same thing. Once we committed, we were consistent and I really love the teamwork / accountability reflected in that
- Double down: I am going to have every week of 2024 reviewed. I am going to follow the same process I have for the last few months, wake up around the same time I do on the weekdays, go get a lift in (either at the Y or Northe Pointe), and then come back to the desk and get into the review. I am looking forward to implementing this.
- Without the high quality monthly reviews there is no way I would have been able to recollect all the experiences and lessons learned throughout the year. That in of itself is motivation to continue to be consistent with them in 2024. I did not miss a month this year which is awesome.
Preparation
- Proper preparation is a foundational principle and is a cornerstone of successful trading. You must show up fully prepared for each session.
Performance
"The trading world has been slow to pick up on the fact that training is a performance activity. The principles and processes that guide elite performers, and other fields can cultivate expertise among traders. This, perhaps is the greatest, and least exploited, source of edge in the markets today" -- Dr Brett Steenbarger
Taking The Advice From Expert Traders Seriously
Enhancing Trader Performance The Psychology of Trading Trading Psychology 2.0 Steenbarger Main Principles
- Notice I said expert traders. I want to learn from guys like Lance, I am sure it evident through my review the impact he has had on my trading. Also of big influence on my trading this year was Dr. Brett Steenbarger. There were of course other traders I picked up things from along the way, but these two indirect mentors to my trading this year and their impact was substantial. I continued to build out my master Note that contains all of Lance’s best content + my notes. I took the studying further by reviewing his videos when problems in my trading arised, as well as listening to the text audibly via Speechify chrome extension. To learn from Dr. S I took notes my highlights from his three best books (imo), and then listened to them via Speechify and assembled the concepts that resonated with my most into a single document.
Building out Playbooks
- Building out your Playbook (which can be defined as “the trades that make the most sense to you” in a broad sense, trying not to make this portion super long) is an essential part of the process towards discovering your edge in markets. Find one trade that really stands out to you, and reverse engineer the opportunity. Your reverse engineer template must be properly structured as to ensure you are detracting the key nuances / variables from the opportunity. When you are first starting I do think the Playbook format is beneficial, and then as you get more experience and a deeper understanding of the Playbook you may opt for a different format. I have also found slight variations of templates for different trades to be beneficial. The Playbooks I am working on building out at the moment are: Catalyst trades (I have most reps and writeups on the day trades, but in the last couple months have ben getting into swings), easy money trades in conjunction with market structure, and over extension trades (OE). I only have one really good OE example TSLA 10/23/23 and I think that is OK and I am open to getting more reps when the high quality ones arise.
- Double down: There are only so many things that truly move the needle for your improvement in trading, and doing a lot of detailed write-ups is one of them. I do not feel that I lack discipline in this area, but I certainly want to double down on the write-ups and crank up the volume in 2024.
Teamwork, We > I
- I think the biggest impact on my growth this year was establishing a team to trade and grow with. Towards the back half of the year the core of the group was operating like a well oiled machine. Idea generation + stock selection, consistently sharing daily weekly monthly reviews and sending feedback, intra-day callouts, support and accountability, sharing educational content, dialogue and discussions that cultivate growth, building relationships. And, most of all, TRADING WAS FUN. It is hard to imagine now what the year would have looked like if I were by myself. This is not the way. Get a team together and ascend to new heights as a unit.
- “Bring people together around a cause and you create a motivated force”
- Double down: Going to reach out to the team over the weekend and discuss how we can double down on the teamwork in 2024.
Consistency & Discipline
- In the absence of consistency and discipline, you are going to be eliminated by the market. To be disciplined as trader, you must be disciplined as a person outside of the markets. This, I find, is one of my strengths. The way that I think about it is this: you do not have to tell a fish to swim, it just knows to do so, it’s built into the fish’s being. Similarly, you do not have to tell me to workout, wake up early, be consistent. I am just a fish swimming. And I love to swim.
