Well, it’s that time of year again. Even though it’s technically just another day like any other, January 1st always seems like a fresh start. The day to forget the past and once again begin anew. 2019 is in the past and 2020 is going to be THE year. I know many traders out there thinking and feeling along these lines. If this sounds like you and/or you’re just a struggling trader, I hope you take the advice offered in this blog into account when making your plans for the New Year. I certainly wish someone would have explained this to me back in 2008.
Let’s dig in...
We’ve been teaching our class since 2016. Recently I’ve been noticing one thing over and over with some of our traders. It’s been a bit of an AHA Moment for me actually. The more I thought about it and dug into it, the more I realized I should have noticed it much earlier. Not to mention, when I look back at my own trading journey, it makes even more sense. It’s like so many things in trading where hindsight is always 20/20.
So, Wayne, what is IT? #WTF are you talking about?
Well, as the title of the blog clearly states, I’m talking about time.
Simply put, a LARGE majority of the traders we see FAIL at Day Trading simply don’t give IT enough time.
Before we dig into this a bit deeper, let me define the “IT” in the above sentence.
IT = ONE PROCESS. A single freakin’ process to implement. Please note, I’m not talking about a single SETUP. I’m talking about an entire process. ANY process should have multiple A+ Setups. If you’re not 100% sure what I mean when I’m talking process, please give THIS WEBINAR a watch. In it, we walk through our thoughts step by step. And to be clear, I’m not here today to push our process. I’m talking about ANY proven Day Trading process.
What we see constantly are people jumping around:
From twitter guru to twitter guru.
This guy just took a HUGE loss and posted it on twitter so he must be good and HONEST!
From chat room to chat room.
This other room projects charts and scans live all day!
From indicator to indicator.
Ok screw MACD X, pivots are the real deal!
From penny stocks to only “real” stocks.
Knew I should have stayed away from anything under $10! “Real” companies only!
From “real” stocks to OTC crap.
I need more volatility than these high beta names! I hear there’s no algos on the OTC stuff!?
From stocks to futures.
I see MY future IN futures!
From futures (since that didn’t work out too well) to options.
What’s theta again?
From options (since that didn’t work out too well either) to Bitcoin.
My barber was trading these on his phone and it seems SO EASY!
From one trading course to another.
Screw these rules, where’s my DVD player?
Screw Day Trading, I’m going back to Swing Trading!
I just need to hold for longer!
Ok, now I remember why I don’t like Swing Trading, back to Day Trading FOR REAL this time!
Freaking earnings throws a wrench into everything long term!
You name it, from X to Y.
From one excuse to the next!
To put how large of a problem this is in perspective, I’ll use our own course and some of our own students as examples. We’ve seen numerous wildly successful traders absolutely nail down our process and make really nice $$$$. FOR A LITTLE WHILE. Then something happens. Rather than BUILDING on the process and start to size in, they do something else. They start to wander away from the process. And wandering around while your money is at risk rarely ends well. In fact, it usually ends very badly.
WHY does this happen? Why do so many do this? It really depends on the trader. For some, it’s ego. For others, it’s a little over confidence. They suddenly think they can trade anything and everything. Some even get bored. Yep, that’s right, bored of making consistent money. Trading becomes less challenging and a little stale.
Regardless of “the why”, what happens is always the same. Rather than fine tuning our process and truly mastering it and making it their own, they do something else. They wander away from the process and start doing other stuff.
Here are a few recent examples:
I’m going to apply Wayne’s philosophy on “super-duper clean IPs”, turn it upside down and start shorting.
I’m going to apply your IP Strategy to the $SPY or the $VXX or the $UNG or _______ tracking ETF.
I see how you use Level2 but it moves way too quickly for me. I’m going to stick to just the charts.
I think VWAP would be a great addition to Mike’s pullback plays. Calculating the distance from VWAP could really help with…blah, blah blah (Wayne stopped listening). <<How many pullback plays have you actually traded? About 6. What was your win rate? Not sure.>>
I’m going to start shorting all the Gap Plays. These things are failing like crazy lately. Heck, I’m even opening an account at a different broker that has better locates.
Here’s a tip for you: An A+ shorting setup is NOT as simple as taking an A+ long setup and turning it upside down. Don’t believe me, go try it for a while.
Again, those are all REAL examples from traders dipping their toes into our process. By the way, the majority of time a trader starts wandering from the process, they truly don’t even have the process nailed down yet.
Unfortunately, far more traders don’t even get that far into the process. Many don’t even watch and read all the material. Then they will take only a handful of trades "somewhat based" on the parameters. That handful doesn’t work out to well. Rather than track them and try to figure out what went wrong (did they miss something or was it a trade that simply didn’t work?), they throw up their hands and go back to throwing darts.
We see this all the time in chat too. Someone comes in for an hour or two or maybe a day or two when things are slow and/or we’re just not trading that well. Rather than sticking it out to see how we’ve been doing this for a combined 28+ years, they’re off to that free discord room that just posted a killer looking chart on twitter. Some even make a pit stop to bash us on social media. Dear twitter...
Everything we’re talking about here goes back to one thing: TIME.
GIVE IT TIME.
You know how many Gap Plays I had to take before I figured them out? How many trades I had to place and how many hours in front of the screens I had to spend before I got even kind of good at reading the tape and counting it down?
And if you are studying an actual process, take your time! Don’t rush through. Let the material soak in and give it time to make sense playing out live on your screens.
That free discord room you’re in? Don’t judge it too quickly either. Maybe it IS a fit for you and your trading style. My point today is to STOP jumping around and focus. Focus on ONE PROCESS long enough to see if it will match your trading personality or not.
What really gets to me about all of this the most is when I see a trader throw in the towel right before they’re just about to get over the obstacle that’s standing in their way. I see this so many times and it’s a little sad and a lot infuriating. The difficult part is knowing if you’re truly close or not. How to decide on that is a topic for another blog.
So, what’s my advice here? Stick with it. Give it time. But remember, IT needs to be a rock-solid proven process. MOST don’t even have that to focus on. If you’re trading without a process you should NOT give that more time. In fact, you should stop trading immediately before you lose even more of your hard earned $. Then spend the time you would have been “trading” studying a process.
Remember Day Trading is a PROFESSION. Like most other professions, it takes time:
Doctor: 4 years bachelor’s degree. 4 years med school. PLUS, 3-7 years in residency.
Lawyer: 7 years
Dentist: Four years.
Airline Pilot: 2+ years to gain the 1,500 hours of flight time AFTER 2-3 months of training. Unless you just want to fly your friends around in a small plane, then it’s only 40 hours? Wait, what???
Electrician: About 4 years of apprenticeship.
But sure, to become a Day Trader you can simply log into some chat room and/or follow a few guys on social media and bank consistently. If that doesn’t work, just join another room, or another and another…
See my point yet?
Happy New Year!
If there’s anything I can do to help your Day Trading process in 2020, please let me know. Cheers and thanks for reading.
Questions? Reach out and/or drop a comment below.