After A Wild August, I'm Starting Autumn With No Expectations

Call it an August miracle. After falling into the red by more than -$10,000 in the first half of the month, I’ve managed to rally back by $50,00 in the back-end of the month to hit my monthly benchmark with just one day to spare in the month.

Not only am I on my largest and longest trading streak in months, but I’ve also managed to post my second-best trading day of the year—as well as my best ever August trading day—this past Tuesday with $17,000 total profit in trades in Ossen Innovation Co. Ltd. OSN, Appliance Recycling Centers of America Inc. ARCI and especially SilverSun Technologies Inc. SSNT.

Although both the market and my own trading accounts are finally starting to swing in the right direction, this isn’t the time to get overconfident. While I have started increasing my initial share size and begun stepping on the gas when a position I’m in starts to run, I’m also attempting to stay aware of falling into bad trading habits simply because I’ve been able to rapidly build a cushion.

Take Tuesday, a perfect example of the potential hazards of success. I actually started the day up $15,000 on SSNT, but shaved off about $5,000 of that before seeking trades in OSN and ARCI. After roughly another 30 minutes of trading, I had managed to hit above $18,000 on the day before, again, getting knocked back $1,000 to end the day where I did.

The ability to know when to call it quits is just as valuable a skill when you’re on a green streak as when you’re in the red. While I never felt the urge to overtrade on Tuesday, mostly because I was happy to have such great results right off the bat, I could recognize that my subsequent positions in all of the stock I traded were meeting resistance.

I attempted to strike a similar balance on Wednesday and Thursday between aggressively trading stocks that were moving and knowing when to step on the brakes. That meant sticking to my rules and not trading stocks outside of my specialty. I passed on stuff that was too expensive or too cheap, that didn’t have at least a few million shares in float or stuff that I just wasn’t certain about. My P/L for those days speak the reliability of that strategy.

Overall, I’ve looked at this past week as a transition point for my trading. It’s the end of the month, the unofficial end of summer and, most importantly, the end of a weeks-long streak of volatility. With all of these changes occurring at once, I don’t want to overcommit to aggressively attacking every promising stock that hits my scanners, nor do I want to leave money on the table. So I’ve tried to set a medium pace and aim for consistency, a guiding principle I would recommend to every trader.

These endings and beginnings—to the month, the season, the trading environment—may seem arbitrary and unrelated to activity on the stock market, but they are significant inasmuch as they are hardwired into the human brain. I’m likely not the only trader waiting to see what September will look like, so I’ve made it a priority to make it there with money to trade.

IWarrior Trading is a content partner of Benzinga.