Introducing StockTickr Goals

December 14th, 2010

Traders need to be always looking for ways to improve their trading. If you’re not regularly trying to get better, then you’ll stagnate and you’ll get worse. Many traders make mistakes – often the same mistakes over and over. (I know I do).

This is why we created StockTickr Goals. It’s a way to create trading goals for yourself, assign them to certain days, and then hold yourself accountable. It’s an easy way to create a feedback loop so you can improve your trading over time.

It’s included with the already free StockTickr Basic accounts and also with the StockTickr Pro service. Get started now and take your trading to the next level.

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Learn more about StockTickr Goals here.

Reminder – Free Webinar Tonight with MB Trading

September 28th, 2010

We’ll be doing a free webinar with MB Trading tonight Tuesday, September 28th at 8PM ET. You’ll see some real life examples of how traders like you have been able to improve their trading and become more consistent in the markets. No matter what type of trading you do, you’ll be able to leave the webinar with some concrete information that you can apply to your own trading.

It’s free! Signup now.

In the webinar we’ll discuss these topics and take your questions:

  • Learn the easiest way to keep track of your trades
  • How to determine what works across a large number of your trades
  • Use StockTickr’s reports to see where you’re trading the best
  • Use backtesting to run simulations and what-if scenarios of the trades you took
  • Categorize your trades by strategy and other factors
  • Much, much more

This webinar promises to be well worth your time. Signup now.

How I Look at Money Management

September 13th, 2010

As I’ve increased my trading size over the years, I’ve thought more about money management and the best way to approach it. You can make money management as complicated an issue as you want to, but as with most aspects of trading, simpler is often better.

As I decide how much to increase my trading size, the main question I ask myself is:

How much am I willing to lose in a single day?

That’s really what it boils down to. You are going to have to tolerate big down days to have the big up days so the question really is how much heat are you able and willing to bear to ensure that you catch the profitable days?

If you don’t have a good idea about how much it’s possible for you to lose in whatever timeframe you’re trading in, then you should probably do a little more research until you have that answer. That’s because one day you will lose that much money (and maybe more with slippage) and when the next trade comes along it’s easy to second guess yourself and screw something up.

5 Ways a Trading Journal Can Improve Your Trading

April 14th, 2010

Most traders, from beginners to professionals, know that keeping a trading journal is an important aspect of trading as a serious endeavor or career. Keeping a trading journal however takes effort and is all too easy to just brush aside and ignore while focusing on other areas in your trading. In this list I offer some key reasons I use to remind myself why maintaining a trading journal is worth the effort.

  1. Accountability – when you keep track of your trades diligently, noting what reasons you had for taking them and how they turned out helps keep you accountable to the trades you’re taking as well as how you’re managing them.
  2. A finger on performance – understanding how your methodology performs and monitoring its expectancy, win rates, and other parameters such as average winners and losers size can help tell you when things are either working really well and you should press your edge or when markets conditioned changed and you need to scale down or re-evaluate your edge.
  3. Research tool – A trading journal can also be an excellent research tool that helps you improve your edge. This can be achieved in several ways, one of them is when you tag your trades and keep track of different variables like market sentiment, candles formations, your own state of mind, or any other variable you can then look for relationships between your performance and those variables. There are many times where I’ve discovered that some trades should be skipped and others traded with larger size as a result of researching my trading journal.
  4. Self coaching – Aside from analyzing performance and quantitative data you may also want to keep track of your overall development progress as a trader, what habits are you trying to change, what goals are you setting for yourself and how are you doing in terms of achieving them. Without monitoring and tracking it becomes difficult to keep focus on those goals and all too easy to slip into bad habits again.
  5. Keeping things in perspective – We’ve all been there, you’re having a really good week or a really bad week, the impact of this type of unusual performance can play havoc on our heads. It is human nature to put more weight on recent events than on statistics of the past 6 months or even years. A trading journal can help re-align our thoughts, expectations and overall mental state by showing us visually how the last bit of performance compares to our longer term track record.

This list of points isn’t revolutionary, but revisiting it helps remind me of why I’m keeping a trading log and how it helped me improve my trading over the years. Hopefully others will find some of these points useful as well.

Should You Consider Re-Entering Trades That Have Stopped Out?

January 25th, 2010

There are many ways that trading can frustrate you, but one of the most frustrating situations is when you get stopped out of a trade only to see it continue in your direction. It could have been a very profitable trade but you were stuck with a loss. Here’s a trade I took in CRM that shows this exact situation. I was stopped out by a few pennies only to see the stock continue down:

Trade in CRM

A lot of traders will take a stock completely off of their radar after they’ve had a loss in it – that’s understandable. What’s the only thing that’s more frustrating than taking a loss in a trade? Taking two losses in the same stock. 😉

That said, it could make sense to keep those stocks on your radar to trade again. The problem is determining whether it makes sense to take the trade if a setup occurs after you’ve been stopped out already. When you re-enter trades, you’ll undoubtedly be stopped out a second time periodically. This can be psychologically difficult to endure and this situation often weighs more heavily in your mind (“Why didn’t I learn my lesson the first time I was stopped out?”).

The StockTickr Trading Journal provides a great way to keep track of this using tags (a.k.a. categories). Tagging your trades in your trading log lets you track and analyze subsets of your trades. When I started re-entering trades that I was stopped out of, I would assign those trades the tag “ReEnter”. This allowed me to compare how these “ReEnter” trades were performing compared to my trading system overall.

After accumulating several of these trades over time, it turns out that these ReEnter trades were outperforming the system overall – in fact, they were significantly better than average. These results were telling me that for this particular system that I trade, re-entering trades made a lot of sense – even if it’s psychologically difficult. Having this type of data available to analyze certainly makes it easier to take trades where your fear is telling you not to.

Will you re-enter trades in your system? I’m interested in hearing what others have to say about this practice.

7 Ways to Improve Your Existing Trading Strategy

January 13th, 2010

Let’s say your trading is going pretty well – you’re trading a good strategy that you’re making consistent profits from and you’re comfortable with. Good traders never rest on their laurels, so you’re ready to take the next step. The existing strategy you trade never consumes all your buying power, so you’ve got some capacity for an additional strategy.

So what’s your next step? Research a completely new trading strategy, right? Not yet, I say. If you are already trading a profitable strategy, many times there are ways to improve, adapt, or add on to it to make more profits – sometimes a lot more. So before investing a lot of time in developing a completely new strategy which can be a long and arduous process, first look at the strategy you already trade.

This has a couple of obvious advantages – you’re already intimately familiar with how your system works and you already have a mountain of real, live trading data to test with which is always more valuable than pure backtesting with is 100% theoretical.

Here are some ways to look at your existing system to try to improve it:

  1. Use a Profit Target – Look for ways to add a target order or modify an existing one. Targets are great for a lot of strategies because they lock in profit and they free up capital sooner.
  2. Adjust Your Stops – Most traders use stops that are too tight. Look at your existing strategy and see if you can make more money by using a larger or smaller stop distance.
  3. Find More Opportunities – If you’ve already got a profitable strategy, it often pays to relax your filter rules to generate more entry signals. Even if you end up with a strategy that is slightly less profitable per trade, the increased opportunities could be well worth it.
  4. Look For Fewer, More Profitable Opportunities – This is the opposite of the previous item. It might make sense to trade fewer but more profitable opportunities by tightening your entry criteria a bit. Often times you’ll find that you can make the same amount of money with fewer trades (and therefore less risk). This can free up valuable buying power to allocate to other strategies.
  5. Automate your Strategy or Part of It – How are you spending your time when you trade your strategy? Are there aspects of that routine that could be streamlined or eliminated? Perhaps the strategy could be completely automated. Maybe the strategy can be modified slightly to be automated.
  6. Look For Cheaper Commissions – If you’re trading big enough, this could save thousands of dollars a month. Changing brokers can be a pain, so make sure the pay off is going to be worth it before going through the hassle of moving money, learning a new platform, etc.
  7. Backtest Losing Trades in the Opposite Direction – Let’s say you’re trading a long strategy and 40% of those trades end up stopping out. What would happen if you took those trades that stopped out and traded them short? Think about it – the trades that stop out have invalidated your long “thesis” with your original strategy. Maybe there’s an edge on the short side with those trades.

Have you found any of these to be fruitful in your own trading? Which was most valuable? Any other approach that you’ve found helpful?

Finding New Edges from Old Trades

June 18th, 2008

Jeff White from penned this guest post about the value of reviewing your trading results. This very topic is why StockTickr exists, so whether you’re trading manually or have moved to automated trading, I think you’ll enjoy it. This is the first in a series of guest posts on trading improvement. Subscribe to this blog to follow them (it’s free).

Is it me, or is the new thing to be “retro?”

From hair styles to clothing, there’s definitely a trend in pop culture these days to find some value in the past and bring it into the present.

Now I’m never one to fight the trend, so let’s just go down this road a little while and see what it might mean for us as traders.

It’s hard to argue with the idea that hindsight is 20/20, so naturally it behooves us to take a gander in the rearview mirror and see what we can learn from our past trades. After all, history can be our guide, right?

Looking Back Means Stepping Forward

I’ve always found it to my benefit to reflect on my trading results periodically. I want to find some statistics which can help me going forward. I want to see the data that tells me which trades are working best, and which ones I should be avoiding. Oh sure, I’m very aware of how profitable my trading is over a designated stretch of time, but to see some substance behind those results is often an eye-opening exercise.

Just recently, I was reviewing my trades which fit into a particular category for the previous two months, and I was pretty shocked at what I found. The P&L for these particular trades was a superficial afterthought, and truth be told, the top-line number provided me with no useful insights about any adjustments which may have been needed going forward. It was acceptable, but the diligent trader is always seeking to build his edge.

Amazingly, examining the trades in closer detail offered me a very clear-cut shift that I needed to make in order to increase my profitability on those types of trades. By making even a minor modification to my exit strategy, I realized that I’d quickly see better results in my overall profitability. As a result, I found the review to be well worth my while.

Review Results, Revive Your Trading

Taking a trip down memory lane for a little while with your trading can ultimately propel you forward at an alarming rate down the road to profitability. Regardless of your trading method or activity level or timeframe, you’re sure to see some clear ways you can improve your trading results if you’ll start looking in the right place.

The reports that StockTickr generates automatically have a wealth of knowledge in them just waiting to be discovered. Whether you’re reviewing Trade Type Performance, Time-Based comparisons, or just looking at your Win % for a designated period of time, there’s no doubt that you’ll uncover info which sheds some light on your trading.

As you realize the benefits that “going retro” with your trading can offer, you’ll commit to doing it more often. We all make time for the things which are important to us, so it’s only natural that as traders who seek to increase our profitability, we take an occasional step back in time so that we can jump forward with our future.