Trading was HARD Until I Learned this BASE HIT Strategy
Summary
TLDRIn this trading-focused episode, the host recounts a pivotal moment in 2017 that transformed their trading approach. After a tough loss, they analyzed their trading data and discovered that consistent, smaller 'base hit' trades were more profitable than infrequent 'home run' trades. This insight led to a strategy shift, emphasizing discipline and smaller position sizes to minimize risk and maximize gains. The episode also touches on emotional trading pitfalls and the importance of having a solid strategy and the emotional fortitude to stick to it.
Takeaways
- 😌 The trader's journey to consistency and profitability involved a significant turning point in 2017, which led to a change in strategy and a more stable trading career.
- 📉 Prior to the turning point, the trader experienced a cycle of large gains and losses, causing emotional stress and an inconsistent equity curve.
- 📊 After a particularly bad loss in September 2017, the trader analyzed 10 months of trading data, leading to a discovery that shifted their trading approach.
- 🤔 The trader found that the top 25 biggest winners and losers did not account for most of the profits, which was a surprising revelation.
- 💡 The real profit came from a large number of smaller trades, which were more consistent and less emotionally taxing to manage.
- 🚫 The trader realized the importance of not 'swinging for the fences' and instead focusing on 'base hits' with smaller position sizes.
- 📉 The emotional impact of trading can lead to 'emotional hijack', causing traders to deviate from their strategies and take high-risk trades to recoup losses.
- 💼 The trader emphasizes the importance of having a strategy, discipline, and the ability to manage emotions as key to long-term trading success.
- 📈 The trader's equity curve shows ups and downs, illustrating that even experienced traders face challenges and setbacks.
- 🛑 The trader sets a daily maximum loss limit and adjusts position sizes based on market conditions and the stock being traded.
- 🏁 Trading is described as a marathon, requiring daily discipline and the ability to handle the emotional ups and downs of the market.
Q & A
What was the turning point in the trader's journey that significantly altered the trajectory of his trading career?
-The turning point occurred in September 2017 when the trader analyzed his trading data from the previous 10 months and discovered that his profit didn't come from his top 25 biggest winners and losers but from smaller, more consistent trades.
What was the trader's initial belief about his success in trading?
-The trader initially believed that his success depended on hitting home runs, meaning making large profits from a few significant trades.
What did the trader find when he analyzed his top 25 biggest winners and losers over the last 10 months?
-He found that his top 25 biggest winners amounted to $215,000 and his biggest losers amounted to -$23,000, which was surprising because the profit from these trades was not as substantial as he expected.
What was the trader's discovery after further analyzing his trading data?
-He discovered that his actual profit came from a large number of smaller trades, where winners between $0 and $4,000 amounted to $510,000 and losers between $0 and $2,000 amounted to $156,000, resulting in a net profit of $354,000.
How did the trader's strategy change after his discovery?
-He decided to reduce his share size and focus on base hits instead of trying to hit home runs, which led to more consistent profits and less emotional stress.
What is the trader's advice on managing emotional hijack during trading?
-The trader advises to accept reality when a loss occurs and not to let emotions dictate trading decisions, as emotional hijack can lead to taking high-risk trades in an attempt to recoup losses quickly.
What was the trader's starting balance when he started his small account challenge on January 1st, 2017?
-The starting balance was $58,315.
How much profit did the trader make in the first month of his small account challenge?
-In the first month, he made a profit of $116,000.
What is the trader's daily trading goal and maximum loss limit?
-The trader's daily trading goal and maximum loss limit are both set at $5,000.
What is the trader's approach to adjusting his trading strategy based on market conditions?
-The trader adjusts his position size and daily goals based on market conditions, the price range of the stock he's trading, and his performance on any given day.
What are the two main reasons the trader believes most people fail in trading?
-The two main reasons are not having a strategy or system in place, and not having the discipline and emotional control to follow the rules of the strategy.
Outlines
📉 Trading Roller Coaster and Turning Point
The speaker reflects on a pivotal moment in their trading journey in 2017, which led to a significant shift in their strategy. Initially, they experienced a cycle of large gains and losses, leading to emotional stress and an inconsistent equity curve. After a particularly bad loss in September 2017, they analyzed their past 10 months of trading data and discovered that their biggest wins and losses were not as impactful as expected. This realization prompted a change in their trading approach, focusing on consistency rather than chasing large profits.
📊 Analysis of Trading Performance
In this paragraph, the speaker delves deeper into their trading data analysis. They were surprised to find that their top 25 winning trades only amounted to $25,000 in total, averaging less than $10,000 each, and their top 25 losing trades were similarly sized. Upon further examination, they discovered that when excluding these extreme trades, their actual profit came from a large number of smaller, more consistent wins and losses. This insight led to the understanding that smaller, more frequent trades could be more profitable and less emotionally taxing.
🔍 Discovering Profit in Smaller Trades
The speaker recounts the revelation that the majority of their profit over the past 10 months came from trades earning between $0 and $4,000, significantly outweighing the losses from smaller trades. This discovery contradicted their previous belief in the necessity of large, high-reward trades for success. They learned the importance of trading with smaller position sizes, which reduced emotional stress, slippage, and allowed for quicker recovery from losses. This realization marked a turning point in their trading strategy.
🚀 Implementing Changes and Seeing Results
After the strategic realization, the speaker decided to reduce their share size and focus on consistent, smaller trades, or 'base hits.' This change led to a more stable and profitable period, with a noticeable uptick in their trading performance. However, they also discuss the challenges of maintaining discipline, especially after experiencing significant losses, and the emotional hijacking that can lead to poor trading decisions.
🤯 Emotional Hijack and Trading Discipline
The speaker shares personal experiences of emotional hijacking in trading, where a loss leads to impulsive decisions in an attempt to recoup quickly. They discuss the importance of maintaining discipline and sticking to a strategy, even in the face of setbacks. The speaker emphasizes the common reasons for failure in trading: lacking a strategy or lacking the discipline to follow one. They also highlight the importance of accepting losses as part of the trading process.
💼 Long-Term Trading Strategy and Risk Management
In the final paragraph, the speaker summarizes their long-term approach to trading, emphasizing the importance of a well-defined strategy and risk management. They discuss setting daily goals and maximum losses, adjusting trading size based on market conditions, and the importance of not letting emotions dictate trading decisions. The speaker concludes by reminding viewers of the challenges and rewards of trading, and encourages them to approach it as a marathon, requiring discipline and patience.
Mindmap
Keywords
💡Trading
💡Equity Curve
💡Home Runs
💡Base Hits
💡Striking Out
💡Momentum Strategy
💡Risk Management
💡Emotional Hijack
💡Position Size
💡Discipline
💡Panic Selling
💡Market Conditions
Highlights
The trader's journey to consistency and profitability involved a significant turning point in 2017.
A cycle of big losses and the pursuit of 'home runs' in trading was identified as problematic.
Analysis of 10 months of trading data in 2017 led to a pivotal discovery impacting trading strategy.
September 2017 was a particularly bad month with a $4,400 loss, prompting a strategic review.
The trader's top 25 biggest winners and losers were surprisingly balanced, revealing an unexpected pattern.
The realization that consistent smaller trades ('base hits') were more profitable than occasional large wins.
Emotional challenges in trading, such as dealing with frustration and the desire to 'flip the desk'.
The importance of discipline and strategy adherence even in the face of emotional hijacking.
The trader's experience with a software error leading to unexpectedly large positions and profits.
The psychological impact of trading losses and the tendency to chase them with higher-risk trades.
The trader's approach to managing risk, including setting a daily maximum loss equal to the daily profit goal.
The concept of trading as a marathon, requiring long-term discipline and strategy.
The common reasons for failure in trading: lacking a strategy or lacking the discipline to follow one.
The trader's strategy for adjusting position size based on market conditions and daily performance.
The availability of a free PDF of the trader's small account strategy for those interested in learning.
Final thoughts on the importance of managing emotions and maintaining a disciplined approach in trading.
Transcripts
[Music]
in today's episode I want to share with
you one very specific turning point that
I had in my journey to become a
consistent confident and profitable
Trader this actually happened uh many
years ago is in
2017 and prior to that I'd been making
money and I had just started my small
account Challenge on January 1st of that
year but I felt like I was in a cycle
the cycle was that I was swinging for
home runs and I kept having big
strikeouts I would take these really big
losses and the result was that My Equity
curve would periodically experience
these big dips and whenever I would have
these dips I would feel like I needed a
home run to get my account back to whole
so I would continue swinging for these
home runs but it was like I was on this
roller coaster where I kept having these
big dips so after one particularly bad
loss and this was in September of 2017 I
decided to take a look at the last 10
months of my trading data and I made a
discovery that I want to share with you
today from that Discovery I implemented
changes in my strategy that have
significantly altered the trajectory of
my trading career now as we know 2020
2021 2022 the market was crazy but I was
still implementing the same lessons that
I learned from this very specific moment
in time where I made this discovery so
let's go ahead and jump into the data
here and I'm going to start walking you
through what I learned okay so if we
look at the month of September here it's
uh probably clear to you that it was a
red month I was down
$4,400 which you know at the end of the
day is not a crazy amount of money to
lose but it's definitely disheartening
and it's frustrating cuz look I showed
up every single day I'm showing up to
trade but I'm not walking away with
consistent profit now at this point in
the year if we take a step back and we
uh I don't know if we'll be able to
easily in this calendar view but it was
a good year in total I had a great start
January February March April was good
May was fine and then it did slow down
in June July in August so I had sort of
some slow summer months and then coming
into September I started with you know
well I guess is this in this case it was
first um first day of the month with a
$4,000 red day so now I'm digging my
myself a whole and I'm sure many of you
have experienced that then we have a
Memorial Day weekend I come back get a
trade on Wednesday it's a red trade so
now I'm down 8,000 on the month no
trades Thursday trying to be disciplined
small trades Friday still red on the
week so now two red weeks in a row I
come back for the next week the first
full week of September and you can see I
got nothing to show for it right I'm R
again this week not by a lot but I'm
feeling frustrated now the Third third
week of the month I got into a little
bit of a Groove made some progress did
really well and then boom in 2 days
literally gave back everything I had
just made in that last week so this is
where on this day right here I was like
all right man take a step back cuz this
was one of those days where I was ready
to flip my desk I was so frustrated I
wanted to throw my laptop out the window
I was just like I'm done I was so angry
I'm sure many of you can relate to this
who are AC Traders the emotions can get
big so after I had this like meltdown
just so angry I was like okay well take
a step back and slow down because you
know what I did several years before
that when I had a turning when I had
like a big struggle a big kind of blowup
loss I went back and I looked at all my
metrics and that was when I discovered
the momentum strategy that I still trade
to this day so I said let's do that same
thing let's go back and look at the data
so this is what I did I looked at the
previous 10 months of data and I made
some discoveries so one of the things I
noticed when I looked at my top uh my my
last 10 months of data was my I looked
at my first my top 25 biggest winners
and my top 25 biggest losers so my top
uh 25 so top 25 my biggest winners
amounted to uh
$215,000 and my biggest losers amounted
to minus
$23,000 so this was over the last 10
months of trading and this actually kind
of surprised me and I'll tell you why I
had the belief that My Success depended
on hitting home runs you know I
periodically would have a day where I
was up 15,000 or 20,000 or something
like that so you know when I was
thinking about my top 25 biggest days I
was thinking those would probably be
anywhere from 250 like
$300,000 so I was a little bit surprised
that my top 25 biggest trades were only
$25,000 because it means they were
averaging less than $10,000 that kind of
surprised me and then what surprised me
even more was that the losers my top 25
biggest losers were also averaging close
to $10,000 just under and I had lost
203,000 so in other words if you took
away my top 25 biggest winners and my
top biggest losers from the last 10
months what am I plus and minus like 12
Grand right plus and minus you know
$112,000 it's uh it's not a lot of money
so I was like wait a second because
because here's the thing I knew that
over the last 10 months I had made
around
$300,000 so I was like if the profit
didn't come for my top 25 biggest
winners and losers then where did it
come from okay so so let's set this to
the side so what we know is that the top
25 biggest winners and losers amounted
to only 12,000 in profit these are
trades where I was objectively hitting
for or swinging for the fences I was
trying to get a big win but sometimes
those big swings it's a big strikeout
and that's why I had the losses so you
know if you think about for instance um
one of these one of these trades that
maybe I took where we had a stock that
was kind of squeezing up the scanner
moving higher it pulls back you know
just for a moment then it pops up right
here and I get in it I'm in it and then
immediately we have one of those kind of
jack knife candles right and maybe this
is like a 10-second chart and on the one
minute it's just like a big you know
either topping tail dogee or even a
shooting star dogee so it's just like
you know I just had enough of those
trades where I stepped up to the plate
for that big trade and then with 10,000
shares the bottom falls out and I'm down
you know almost a shared down 10 grand
okay so you know and I so I was looking
back uh on January and for what it's
worth January 1st of 2017 was when I
funded my account with
$583 15 all right so the starting
balance here was
58315 and I produced $116,000 of profit
which no doubt was a you know an
impressive amount of money to make in
that that first month some people by the
way you know like to see the broker
statement to verify that so I'll just
show this to you here um this is my
actual
audit of my trading that began on
January 1st of 2017 because this is when
I started my small account challenge so
that first month I actually got uh
2746 return even though it wasn't like a
crazy amount of money at 16,000 it was
still a big percentage return now I've
continued trading in this account for
the last you know 1 2 3 4 5 6 7 8 years
and the account's still growing it's
over 10 million now and audited verified
gains I'll remind you as always that my
results are not typical but my hope for
an episode like this is that you're able
to learn from my lessons my mistakes
I've made and from some of the turning
points I've had in my career and that
perhaps some of these could help you in
your own trading so so anyways January
was 16,000 you know that was solid I did
though have you know that one kind of
bigger red day going into Fe February a
$60,000 green month which was great a
couple of big red days and this is sort
of the theme is that I'm generally
consistent but then periodically I'm
hitting losses that are bigger than my
average green days how many of you guys
experienced that you've got you know
nice decent green days but then when you
hit losses there you know three times or
four times what you're averaging on
those green days so this was kind of the
theme through 2017 uh this was a good
month in May the the red days were
really small but this was an exception
not the norm and in fact I didn't make
even a lot in in May and this was the
beginning of when things kind of slowed
down it was slow in June only with 8,000
in profit it was slow in July it was
slow in August and then as we know it
was read in September so this was part
of what was getting me so angry in
September was the fact that things had
gotten really slow and then sort of in
the midst of them getting really slow I
end up you know taking some big losses
and I feel like at that time I I just
couldn't afford it you know it was like
this isn't something that I could really
tolerate right now okay so since I knew
that my top 25 biggest winners and
losers had not accounted for a very
substantial amount of profit over the
last 10 months I decided to kind of open
up my filters a little bit more and I
said well let's let's look at winners
that are bigger than
$4,000 and then losers that are bigger
than 2,000 right so I I'm kind of
setting the bar just like a little bit
uh wider so you know casting a wider net
and what I discovered here was that my
winners that were 4,000 and up were
$319,000 and this of course included the
top 25 so I was like nice okay that's
that's more in line with you know what I
was expecting and then and then I look
at the losers which were $2,000 and up
and I realized that I had lost $
361,000 000 in this same 10mon period so
I was actually down like 40 Grand
$42,000 and I was like wait a second
this is crazy so so you're telling me
that if I look at all my winners of more
than 4,000 which I felt like were like a
solid winner and I also look at all my
Losers of more than 2,000 in the last 10
months I'm actually losing an average of
four grand a month so now I was really
perplexed because I'm like well wait a
second then where is my profit coming
from so well the obvious place to look
now is Winners that are between $0 and
4,000 which I would consider not to be a
home run but just kind of like a base
hit trade so I was like all right well
you know I I wasn't expecting to get
down this far but all right let's just
look at it so now I'm looking at winners
that are 0 to
4,000 and losers that are between 0 and
2,000 all right and this is what I
discovered right in here my winners
$510,000 in the last 10 months and my
losers were only
156,000 which gave me a net profit of
354,000 now remember when I said I was
only up about 300,000 in the last 10
months so all of a sudden I'm like wait
a second if I focus right in here
meaning I'm focusing on winners between
you know basically 0 and $4,000 and
losers of less than 2,000 I would be
averaging in fact $4,000 more per month
even if I never had any more home run
trades and this this really did confuse
me because I was like I I can't really
accept the fact that I could be making
more money with smaller share size
because this was the thing that I also
calculated my average position sizes up
here were about 15,000 shares all right
right now my average posi positions in
this area were more in the range of 6 to
10,000 shares so they were smaller
positions so I'm like how am I making
more money with smaller positions that
seems counterintuitive to what I would
expect you know over the years having
thought about this
more with a smaller position it's a lot
easier emotionally to cut your losses
you can just let it go you're like it
doesn't matter and with a smaller
position it's also easier to move in and
out of the market you don't get as much
slippage you start trading with 15
20,000 25,000 shares especially on a
thinly traded stock you could easily get
five eight even 10 cents of slippage and
that could be the difference between a
break even trade and a$2 or $3,000
losing trade and then on the losing
trades it's a difference between losing
only let's say with 5 to 6,000 shares
maybe you lose 10 cents you're down 600
bucks you do that same trade with 15,000
shares you're selling when the stock is
is dropping you're getting a ton of
slippage and you're losing let's say you
lose 30 cents all of a sudden you're
down 4500 on a trade that with only
6,000 shares would been 600 bucks and I
think that that was one of the big
discoveries for me so this was again in
2017 this was before the pandemic and
before commission free trading so it was
during a period of time when there
wasn't as much volume in the market as
there is today so moving in and out of
Trades at in those days was not as easy
as it is now so think there there are
some things that are a little bit
different but the moral of the story and
the big lesson for me was the
realization that I actually would be
making more money if I trade with
smaller share size and did not try to
swing for the fences and so what I ended
up doing coming out of this uh sort of
slump that I was in here in August and
September is I said all right well let's
see if I can apply this moving forward
so moving forward I decided to reduce my
share size so I brought my share size
back down I became a lot more
conservative and I ended up focusing
just on base hits now what ended up
happening was over the next uh 30 days I
had a nice stretch here that began as
you can see right here on September 27th
so this was the turning point right here
so these were nice nice small days and
then going into October look at this
this ended up being a no Red October now
to be honest I didn't have a lot of huge
green days I had a $5,000 day but the
rest of the days were in the range of
you know $2 $3,000 I finished up $35,000
here for the month of October and I felt
so confident I felt I felt on top of the
world my account was back at alltime
highs I was like yes I'm doing this I go
into November I keep it up now I'll say
as you can tell I had a couple of
setbacks one of the things with this
setback right here was that I had two
Incredible Days and these these days
were really interesting because this was
actually not the result of swinging for
home
runs this was actually the result of a
of an error in my trading software which
was kind of crazy so what what happened
there I remember these days because on
Wednesday the 15th I get into this trade
and you usually what I do for those of
you that are familiar is I'll often
press the buy button a couple of times
and I had just switched to new software
and the software that I was using was
changing the position quantity based on
um the current number of shares that I
had so typically if I'm getting into a
position with 3,000 share positions I'm
going to buy once and twice maybe three
times so I did that I got in 1 2 3 times
9,000 shares so I I went kind of to the
top of my window of share size which is
about 10,000 ,000 shares and then I I
think I said I was like okay I want to
add to this position and go up to like
10,000 shares or something like that and
so I pressed the buy button and I think
I pressed it twice and so it sent two
more orders out for 9,000 shares so now
all of a sudden I accidentally sent out
for a 27,000 share order and I remember
looking at the bid and being like whoa
there's someone bidding on this stock
and it was my order I didn't even
realize it so I I didn't get a full fill
on my order I got a partial fill and
then the rest of it was sitting on the
bid now the stock ends up going up over
a dollar a share and I locked up
$33,000 which I think at the time might
have been one of my biggest green days
that I had ever had and I realized after
the fact that I had had this like this
was this was nuts like what just
happened and so I thought I figured out
the problem and I thought that I fixed
it and then literally the next day it
happened again and it it's just like
honestly it was lucky that it happened
on days when the market happened to be
hot because if it happened on days when
the market was really cold I could have
gotten destroyed but the market was hot
and so I ended up having two huge green
days and then Friday ended up having
kind of a a bigger red day and you know
I don't recall what happened on this day
here um I guess we could take a look at
it and see see where things went
wrong H yeah so I went into the green
and then dipped down into the red and
then was down 5,000 this looks to me
like a day where I fell victim to what I
would call emotional hijack because my
final trade let's see what time of day
was this 11:50 so it's later in the
morning right I went from green to Red I
almost made it back to flat and then
back to a little deeper red and I think
I probably I probably took a high-risk
Hail Mary trade hoping to get myself
back to green and then flush deep into
the red I think this is a day of
emotional hijack and the fact is when I
look back in my trading unfortunately I
do still fall victim to emotional hijack
even today so now this is 2017 so we go
all the way forward to
2024 and you know you'll see these nice
long stretches of green days but here in
March uh of this year emotional hijack
on this day right here it was actually
two days of emotional hijack and you
know I finished that that week red
15,000
now one thing I would say about
emotional hijack is that you know
contrary to you know the focus here
which is on this is very much strategy
based this is about figuring out
essentially the analytics of your
trading and modifying your strategy so
you're doubling down on what's working
and totally dropping what's not working
my Discovery was learning that I was
making a lot more money on base hits and
so I should stop focusing on trying to
hit home runs and and just go all in on
base hits but inevitably what would
sometimes happen is after a period of
you know 2 3 weeks whatever four weeks
that are consecutive green weeks I'm
doing really well I have that day where
you know I step up for a base hit but
bad luck I get caught in a news flush or
a stock that announces like an offering
or whatever it is and with even small
size I'm down five grand and immediately
it's like a kick in the teeth and I'm
angry I'm frustrated and I'm immediately
hijacked by those emotions and now I'm
looking for another trade to try to
recoup that loss as quickly as I can we
can look at this Monday here um the the
11th because this is a perfect example
of it I was in the red in the green and
then gave it up here and then traded all
the way to the end of the day this is
total emotional hijack terrible terrible
emotional self-control and then on this
day I came in swinging really hard and
just got totally smoked on a trade where
I took way too much risk and I took too
much uh too many shares and the reason I
took so many shares on that was because
I was trying to recoup the loss from the
previous day and so one thing that I've
come to learn is that with trading it's
very common even after years and years
of consistency and success to deviate
away from what you know is sort of the
rule of your strategy in moments of
emotional hijack and emotional pressure
where you feel like you've made a
mistake and now you need to recoup those
losses and maybe today it's okay that I
just take more size because the thing
that happens is when you're in this kind
of um mindset of focusing on base hits
you know just nice consistent Bas hit
trading when one of these happens all
the confidence and the good feelings you
had right here are gone and right here
you are feeling sad and you're angry
you're disappointed and the fact fastest
way to feel better is to be able to
press you know contrl Z undo the last
trade and go back to right here but
unfortunately as we know the market uh
doesn't work that way so the only way is
either to have a lucky trade that gets
you right back to whole or to accept
reality right now that you got knocked
down and it's going to take a little
while to recover and it's hard to accept
that until you accept that you'll keep
swinging like this and then that's when
you can end up you know going like this
and I've seen Traders do that I've seen
Traders have an excellent run of weeks
months even years and then a loss of
confidence stubbornness frustration and
now from a place of emotional hijack
they're not trading the market they're
trading their p&l and they just start
stare stepping down so you know we're I
think we're all um going to be victim to
this at some point because listen
trading is hard and we're only human and
we're trying to do something that's very
very difficult I have also come to learn
that most people in trading fail for one
of two reasons the first reason is
because they don't have a strategy at
all now a lot of the people that came
into the market during the pandemic
GameStop era and everything else they
had a lot of beginners luck it seemed
like everything that they might have
bought was going up and they didn't need
a lot of strategy same with the Doom
bubble but when the bubble burst and
when the pandemic you know when all of a
sudden interest rates went up because of
inflation everything else the market
softened and now people are like whoa
do I actually know what I'm doing and
some people started to lose money if you
don't have a strategy a system a set of
rules that you're going to follow every
single day in your trading you're not
going to be able to do this for decades
on end you're not going to have
beginners luck that'll last that long so
the first reason most beginner Traders
fail is because they don't have a system
or a strategy now I by the way I will
let you download the PDF of my small
account strategy you can download it
it's free you can practice trading it on
your own and if it's helpful for you I'm
happy for that if you decide to become a
member of warrior trading that's awesome
if you don't that's okay too there's
going to be a like pin to the top of the
comments and Linked In the description
where you can download my small account
strategy so you can download a strategy
you do not have to be the traders that
are in group number one who fail because
they have no strategy but then there's
group number two the second reason
people fail is they have a strategy but
they don't have the aptitude and the
emotional wherewithal and the discipline
to follow the rules of the strategy and
I'm telling you sometimes it feels like
I am barely holding it together myself
cuz it is such a struggle on some of
these days not to flip over my desk and
just start slamming that buy button CU
I'm angry but being able to have
discipline and composure is absolutely
what separates traders who make it long
term from those who don't and not
everyone has that attribute that ability
to be calm cool collected I don't think
that I naturally have it but I've
trained myself into it and so there is
hope there is a chance that you can
train it even if that's not how you are
naturally so these are really to me the
two most important things in trading a
strategy set of rules in a system and
the discipline to follow it but I want
you to remind yourself that yes you're
only human and you will have setbacks
from time to time and that's the thing
you'll be on a good track and then all
of a sudden you'll have a little bit of
a setback so if we look at my trading
here um I mean we could just look at the
last um last year uh we go to we can do
the last like 18 months or whatever um
let's see so we'll go to recent uh no I
want to go to detailed and I just want
to show you the equity curve here and
just to kind of give you perspective
that this is the reality for me at least
of what it's like to be a Trader there's
ups but there's obviously Downs you can
see these dips and when I'm having Downs
I get depressed I get bummed out and I
start to feel like man the only way to
recoup this loss quickly is to hit a
home run but base hit trading is how I
have built my career and even during the
crazy markets of the pandemic I was
still trading just focusing on base hits
the only difference there was that
everything seemed to be bigger I could
take bigger Shar size the base hits were
bigger but they were still for the most
part base hits so this is the way I
trade it's just slow and steady and if
we go back to looks like if I do it like
this I could go into 2017 so we'll go to
2017 here and this is what you'll notice
so I had this really strong first
quarter of the year with a small account
and then I went into this period of
going kind of you know stagnant I was
going sideways and it was because I kept
having these bigger red days right if I
wasn't having these bigger red days
every couple of weeks I would have been
you know making progress up here and so
this was the turning point right here it
was September 27th that was the point
where I said all right Ross you got to
focus on base hits reduce share size and
I realized it's so much easier to get in
and out and to be Cutthroat about
cutting your losses when you trade with
small size you can be nimble you can
lock up these profits and you can do
really well now I'll tell you that as I
said during the pandemic I did pull away
a little bit with my share size and I
got more aggressive and that was the
right move for that market but even
today right now even though I've made
more than $10 million a trading I start
each day with a maximum position of
5,000 shares until I have made more than
$11,000 I start each day at zero because
I'm a day trader and I set my Max loss I
don't like to go down more than five
grand but to be honest because I start
each day with $5,000 position size the
only way I can go down 5,000 is either
losing a full dollar a share on one
trade which is terrible or more likely
having like three losers like this where
it's just not working and if that
happens then that's fine I'm out of the
market but these are still for me
reasonably small days that are red and
as long as each one of these losses is
more in the range of
$1,500 I can tolerate three losses that
total out to 4,500 but on the flip side
on a day when things start working with
one or two trades next thing you know
I'm up, 1500 1,600 and then as soon as
I'm up more than $1,000 I take off that
cap I could start taking a slightly
bigger size up towards 10,000 15,000
shares Max generally speaking and then
you know I can make my way up towards my
daily goal which is 5,000 I like to set
my daily goal the same as my Max loss I
don't want to lose more in one day than
I can make in one day so if I'm
averaging only let's say 2500 a day in a
current market I'll tighten my Max loss
to that same amount and I'll set that as
my new Target so these are always this
is dynamic I do adjust it based on
market conditions and I adjust it based
on the price range stock I'm trading
naturally 10,000 shares of GameStop is
not the same as 10,000 shares of a 30
Cent stock or something like that so you
know you do have to be able to kind of
give this some wiggle room but um I I
think one of the things that I just want
to emphasize for you is that what I've
learned in my career is that trading
really is a marathon in the truest sense
of the word that you fight every day
it's a struggle it's not easy it's not
exactly fun but it can be rewarding and
those who find success are the ones
ultimately who are very disciplined I
hope you found this episode helpful if
you did I hope you hit that thumbs up I
hope you subscribe to the channel Feel
Free as always to download my small
account strategy PDF and I'll remind you
as always trading is risky my results
aren't typical so manage your risk take
it slow and I'll see you here for the
next episode real soon
[Music]
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