2015 is behind us. For me, it was a year of big changes and big tests on the strategies I use. With this post, I’d like to share with you my trading plans for the next year and ask you about your thoughts on 2015 and hear about your trading plans for 2016.
The year of big changes
In the last post called „It’s time for changes in my trading” I talked about the past 4 months which I’ve spent mostly implementing some modifications to my strategies. Starting January 4th, I am fully focused on these strategies and I’m damn excited about them. If you read the previous post, you know why.
In 2015, I traded in just over 190 sessions. It wasn’t much considering how much time I spent trading in previous years, but there was a reason. My son was born and that completely changed my priorities 🙂 Also, there was the insignificant matter of not having any free time.
In the past year, I screwed up several times breaking some of my rules and I screwed up horribly a few times by breaking ALL of my rules. Happens. I am just a man and I make mistakes. Unlike some, I don’t try and blame them on anything else other than myself. But I learned from my mistakes. These lessons are the reason why I started modifying my strategies in the last months to further narrow down the niche I trade in.
The mistakes of 2015 – impatience
I can be patient waiting for an interesting position. It’s harder for me to hold on to it despite there being no significant indicators that it’s going to close. In other words, I exit too quickly in some strategies.
I have analyzed a lot of the quotes and charts detailing the transactions I make (I record all my sessions) and I very often close a position after the first correction realizing the profit completely. In the end, I’m profitable, but this way I decrease the potential value of the position and the profit it could bring.
The mistakes of 2015 – the fear of missing out
I had a strong period when I was nailing the shifts in trends, especially the so called pump and dumps, referring to companies whose price is inflated (i.e. move from 2 to 7$ without much prior news), but it has built a feeling of false confidence, which always ends the same way. I started to act before certain moves materialized sensing that it is the right moment. It was a result of me not wanting to miss the moment of reversal, which didn’t make sense. I prefer trading setups that are clearly drawn up and finish as expected.
The mistakes of 2015 – unused potential
Sometime, the probability of success of some setups is much higher than the norm. When this happens, I shouldn’t lose time considering it, but hit a really big size instead. I was lacking in this department. I want to use that potential a lot more using the new principles incorporated in my modified strategies.
Trading strategies for 2016
The new year is going to be a huge test for me. I’m going to focus on the four setups I’m going to play. I am throwing away the remaining ones (maybe I’ll come back to them at one point, but not in the next 6-12 months). I was convinced I play in a pretty well defined niche, but after some analysis I now believe that there it’s still too large. I have to keep an eye on too many things which makes me miss out on the potential of some positions. And some of those really strong signals lead to much larger profits than lots of smaller plays.
This change will also be a hard lesson in patience. I really want this to work out.
Another important change will be the addition of full position scaling, which means putting additional trades on a winning position. I have already tested it quite a bit and I like the results. So far I have always put a main trade on and a single additional one. Starting this year, this is going to change.
More patience when realizing profits. Exiting with partially realized profits when a stronger correction takes place, but leaving part of the position for the remainder of the move and possible position scaling.
Limiting the number of companies traded in a session. I really want that number to go down to no more than 5-10. I can tell that the session where I focus on only a few companies have a different profit margins than those where I trade 20 different ones. I can’t cover them all correctly. I should have realized that a long time ago.
Finally, I want to increase the effectiveness of individual trades, decrease the generated costs compared to gross profit and most of all, I want to leave my comfort zone, which has offered the same level of profits in the last couple of years. It’s a level I’m very comfortable with, but I want to change it anyway. I’m not going to be daytrading until my old age.
A summary of how this is working out will probably appear in a few months and I’ll provide a full recap at the end of 2016 🙂
One thing I wanted to stress. I don’t like having plans for how much profit I want to make. That doesn’t work for me. It builds up unnecessary pressure, especially when you get close to the expected amount.
What are your thoughts and plans for 2016
I love talking to other traders. It’s always a good lesson and an opportunity to exchange experiences for both sides.
So here it goes, I kindly ask you to answer these two questions:
-
What are your thoughts on the way you traded in 2015. Positive or negative?
-
What are your trading plans for 2016?
I would really love to read about your thoughts on the past year and your New Year’s resolutions so please feel free to use the comments section below. Fire away!
