A Dispatch From Trader Rehab

This week marked the start of something new to my trading career, I’m finally going to be a successful trader!

I know that sounds strange after a year of posting daily profits that range anywhere from $5,000 to $30,000 or more, but hear me out. I did some pretty extensive homework over the past few weeks and I uncovered some pretty astonishing statistics about my trading. I highly recommend checking out the video I made breaking down my stats over 2019, but I’ll give you the abbreviated version here.

What it comes down to is that those +$30,000 trades where I was taking 20,000 share size were losing me money! That’s because, on the other side of it, those same trading strategies were a net drag on my real profits. Those real profits, it turns out, were in trades where my average share size was just 6,000.

In fact, I would have made more profits this year by exclusively aiming for base hits. My net gains over the first 10 months of 2019 are around $300,000. If I hadn’t taken share size above 8,000, I would be up another $50,000, more than 16% higher.

I had written previously about getting frustrated with the size of my losses this year, but I never expected the drawdown from my aggressive strategy to be so huge!

So starting this month, I’m setting some strict limits to how I trade that are even lower than my whiteboard calculations. I’m capping my share size to just 2,000 while also limiting my daily max loss to just -$1,000.

November is going to be an interesting month, but I think it’s a necessary step in order to dial back some of my more impulsive and adrenaline-fueled habits before I really get into trading for my account rather than for the thrills.

Warrior Trading is a content partner of Benzinga