+17 Points – The Trading Week in Review
Those of you who follow Samurai Trading Academy on Facebook have probably already noticed but this week I've started to put out regular market recaps again to go over some of my trades. It's pretty time-consuming putting together detailed recap posts each day and sometimes difficult to find the energy after a highly focused trading session but these quick video recaps are a lot easier to stay on top of.
I've been getting some really positive feedback about them online and through emails from many of you so the plan is to get out those quick updates when I can and then to put together a weekly review post on the results with a useful lesson or two to be gained from the week.
If you're interested in checking these videos out you can Like the Samurai Trading Academy page and videos on Facebook or Subscribe to our YouTube page. Make sure you still check out the blog here for these Week in Review posts or keep an eye out for updates through the STA Newsletter.
The Trading Results
You'll likely notice a couple things right away when looking at the video of results below.
First is that I didn't trade on Monday. Long time followers of this blog and my trading approach know that I very rarely trade on Mondays as I prefer to take long weekends most of the time. Guess that's one of the advantages of running your own business on your own schedule, right?
Second, I did sit down to trade on Friday but didn't actually take any trades. This is quite unusual for me as I'll usually find at least a trade or two but when market conditions aren't great and there's no quality setups that fit my plan I have no problem sitting on my hands and just waiting things out. That kind of discipline is actually a really important part of trading professionally so we'll touch on it again in a moment.
Lesson #1: Some Trading Days Are Better than Others
One thing that instantly pops out about the weekly result is that Wednesday was a fantastic day and offered the majority of the profit for the week. This isn't all that unusual because most weeks will have one or two days that have more potential for profit than the others. Sometimes it's due to more volume or volatility, but sometimes it's just because the market is respecting areas a bit better and becomes a bit more predictable and easier to trade effectively.
This kind of shifting behaviour day to day is a big part of the reason why I'm not a fan of the common "2 points per day" mantra you commonly see online when it comes to ES futures trading. When you aim for a small target like that you can really limit yourself as some days have far more potential. Stopping early because you hit 2 points can mean missing out on a number of high quality trades on a day that the market is moving really well and giving more opportunity to trade than usual. Missing out on that potential can really add up over the long run.
When a trader begins to "let go" of the need for daily targets it tends to open them up to more elite levels of profitability. Most veteran traders know that they're not going to trade often enough on a single day to always let their edge play out so they just go along with the flow of the market and stick to their plan by taking one quality trade at a time. That focus on following their trading plan and executing well is what really matters, not the outcome of a single trade or day.
Lesson #2: Don't Force a Trade
I knew going into Friday's trading session that it might be a bit slow. The volume was minimal in the pre-market and there were bound to be a lot of traders getting away from their desks early for the Memorial Day long weekend in the US. Still, I was hopeful for a good trade or two even if price momentum less than usual as the market will usually offer some good setups if you're patient.
As it turned out I was a bit too optimistic and there weren't any trades to be had so I just observed patiently and didn't trade for an hour. This might not sound like a big deal but it's difficult for a LOT of traders. After all, if you're calling yourself a trader then you should be trading, right? But the reality of this profession is that traders who are successful long term don't trade just for the act of trading as a gambler might place or her bets in a casino just for the rush it brings. Instead, they trade because they have a setup that fits their trading system and has a positive expectancy.
It's not easy to let go of the urge to trade and I doubt even after a dozen years in the markets that I'll ever truly master that feeling. I have learned to control it for the most part though by asking myself what's most important - the rush of being in a trade, or being profitable? Most traders will tell themselves they're trading to do the latter but many don't have actions to match. If being profitable is the most important thing then you need to be disciplined and stick with your trading edge.
If I can't find a trade that fits the conditions of my system then I don't have a known edge. I know my trading setups and I have a good understanding of their expectancy over dozens of trades so if I want to be profitable I just need to stick with what I know and do it repeatedly. If that means that there's the rare day that I don't trade because the opportunity doesn't it present itself then I'm not concerned at all.
After all, there's always another trading day and plenty of high quality trades to come!
- Strike While The Iron is Hot - March 1, 2021
- The Path to Becoming a Full Time Trader - February 22, 2021
- Looking to 2021 and Beyond - January 20, 2021
