Talk about a wild week, both personally and professionally! The week began normally enough but by the end of it trading was one of the furthest things from my mind. I'm currently spending time in Calgary with family and friends, so the massive flooding kind of threw a wrench in the gears for what should have been some great late-week trading.
To give you a little bit of an idea of what the flooding was like, here's a couple pictures (click to enlarge):
As you can see, Mother Nature was rather volatile here, and the markets were too. Things started a bit slow early in the week but once Ben Bernanke and the FOMC got involved on Wednesday, volatility went through the roof. There's a lot of uncertainty out there in terms of the various quantitative easing programs and the tapering off over time, and that nervousness was reflected in the market with some strong moves.
Luckily, as adaptable day traders we can thrive on this sort of emotional response in the markets and the volatility becomes our best friend.
For this post, I want to share a couple more complete week recaps along with charts from students in our STA Training Program. What made this week in particular so interesting was that we saw a couple days where the market movement was incredible with swings in both directions, and this was a new experience for some of the students in the group. These environments are usually not fully taken advantage of by newer traders as the market speed fuels uncertainty and hesitation, but they are a great learning experience and they open up the ability to truly capitalize when these market conditions come up again.
This was a week where traders could have absolutely killed it for 20, 30, or even more points, but not everyone wants to be tied to the screens all day. After all, freedom is what day trading here at STA is all about. Although the stated goal of the STA Training Program is to have our students consistently making 10-15 points per week by trading from 9:30 EST to 13:00 EST, many of our traders have been able to achieve that while only trading ~2 hours per day.
Since people email me all the time about potential day trader earnings and because the results below are in line with our STA targets, here's a table to give you an idea of what a trader can make by bringing in 10-15 points per week (before commissions/fees):
The Professor Continues to School the Market
Consistency is what day trading is all about, and The Professor continues to see solid results just like last week and the weeks before. Also note that this trader usually focuses on the market for only a couple of hours each day, making those results even more impressive. With more experience his win rate will continue to improve, sharpening his edge even more. His results are already well beyond the vast majority of full time traders so any improvements to his results will move him into some very elite company.
As you can see above, The Professor also took Friday off to get started on a house party that lasted through the entire weekend. Somehow my emailed invitation must have been lost in the tubes of the internet, but no doubt he will be happy to host all the STA traders the next time he throws a full weekend bash. Right, Professor?
A Different Approach from AK
What I like so much about AK's charts and weekly results is just how different they are from The Professor's on a daily basis while ending up in the same place at the end. AK has been on a bit of a different schedule lately with some other commitments outside of trading, but has still been consistent for a number of weeks in a row by fitting in trading when he can.
If you compare AK's daily results with The Professor's above, you will see that they rarely line up on a daily basis but that the weekly result is quite similar. This shows the power of an adaptable trading system that has a good hit rate combined with an excellent risk to reward ratio. This positive expectancy allows traders to be flexible in their approach by working around their own schedule, while still finding excellent long term results as day traders.
What I loved seeing from this trading week is that AK knew when to stop and walk away. Although he was seeing a lot of success during the week (up +20 points), Friday just didn't get off to a good start. Rather than getting upset and bringing emotion into his trading (which usually leads to much larger losses), he just accepted the small losses, called it a day, and went to enjoy the weekend.
If things just aren't working there's no reason to put good money after bad. There will always be a better day coming soon, so walk away, mentally refresh, and come back positive and ready to go later on.