2019- A Year in Review

“Every trader has strengths and weakness. Some are good holders of winners, but may hold their losers a little too long. Others may cut their winners a little short, but are quick to take their losses. As long as you stick to your own style, you get the good and bad in your own approach.”

-Michael Marcus

I want to start this blog post out and give you a little insight into the day in the life of myself. I’m in my early 30s. I have a full-time job with very demanding hours, I work shift work, 2-week rotating shifts, days and nights. When I’m on night shift I’m able to trade the markets from open to close. Any free time I have outside of work I dedicate to the markets and my trading. I think I can confidently say my trading has turned into a second full time job. I will continue to dedicate myself to the markets and the refining of my trading skills until I’m able to achieve financial independence and ultimately become a full-time trader. Overall, 2019 turned out be an incredible year for me as a trader. I want to thank everyone who made that possible, especially Trader Stewie and the AOT community. I continue to grow as a trader each and everyday. I wouldn’t be at this point in my trading career if it wasn’t for the support of this incredible community, so thankyou!

Now let’s take a look at my 2019 year! First, we will start with the goals I laid out in 2018 going into 2019. I’ll list my achievements from 2019 and then we will transition into the challenges I faced as a trader and how I over came them.

Here are the goals I laid in 2018 going into 2019. I followed these rules according to plan. I broke my trading performance down into two categories. I tried to highlight everything that had held me back, or had potentially cost me money in the year of 2018. You have to be honest with yourself. I’ve organized these weaknesses into two categories. Internal and External factors. I’ve categorized anything under internal factors that might be considered skill sets or something that might take more practice, and time as a trader to develop. Anything under external factors is something that is directly controllable now, and in your power, to change immediately.  I’ll list some of the things that I’ll be working on and changing for 2019.

Internal Factors:

• Always sell gap ups. PERIOD!
• Using mapped out levels on the 5-minute chart, use market limit orders to enter day trades
• No more than 2 day trades a day. 4 failed day trades in a week = STOP.
• Don’t be afraid to use weekly options to mitigate risk when trying to play short term market reversals
• Feeling uneasy or burnt out? Take a break. Clear out all positions
• $1000+ gain in one day. Sell positions. Take the day off.

External Factors:

• Switch to a broker with more flexibility in terms of advanced trading options. (Trailing stops, faster and easier execution of market orders, after hours trading etc….)
• Trade directly from my trading software. (Faster, more control)
• Upgrade my trading arrangement (New desk, Monitor, Chair. Make it feel more professional)

With these rules I set out in 2018 for 2019 I was able to define consistency and turn out a great year. I was able to beat a market that in my opinion was easier for investors than it was traders. The slow methodical grind higher and the low VIX environment didn’t create that many opportunities and when it did, they were very few and far between.

Let’s take a look at some of my achievements for 2019. Then we will examine some of the challenges I faced as well as reviewing the year as a whole.

2019 Achievements:

• Stuck to my rules. Rarely deviated from the plan!
• First trading year with two 5 figure months!
• $APC Buyout which I bought the Friday before. (Biggest 1-day gain of the year +$5100!!!)
• Closed the year out slightly beating the market. 31% gains.
• Severely lagged the market the first 6 months. Through determination and process beat it by year end!

2019 Challenges and Yearly Trading Review:

2019 for me could probably be defined as a year of emotional management. As a trader, letting emotions get in the way of your trading can not only hinder your performance, it can potentially break you. In my opinion 2019 was a very hard market to trade from a swing trading perspective. The low volatility and slow grind higher made it difficult to manage positions effectively. It was definitely an investors market. That paired with the massive sell off in December 2018 it made it very hard from a emotional standpoint to want to be heavy long in the market from January into March. This Bias killed my first quarter of 2019. The biggest emotional obstacles I had to over come in 2019 were two unexpected BIG gap down losses in mega market cap names. The first of which was $AAPL and then shortly after $BA. I generally size my trades a little bigger when it comes to companies with a proven track record and stability in the market so these losses really stung. We will review those and how I over came them in this post! On a more personal note I lost my Grandfather in late August. I spent almost every other day with him, at his home from April up until his passing in late August. This was one of the toughest times in my life.

Let’s take a look at my equity curve for 2019 and pin point the defining moments.

Basically, the first trading day of the year I took a substantial loss on Apple. The stock was halted after hours and they warned on an ER miss. This was probably the worst way I could have started my year off. In the weeks to follow I over traded the market (mainly short) and gave back even more. I couldn’t get over how quickly the market sold off in December and instead of following the flow of the market in January I traded against it. Costing me dearly. As you can see from the infograph I switched gears in February after reviewing my own stupidity and made back all of the previous $AAPL losses plus a bit more.

I was positive on the year at this point. After gaining momentum I sized up on a $BA swing trade the Friday before the big news hit. Taking another massive hit and eventually sending me back into late January lows.

April I really concentrated on smaller size positions and gaining some ground back in the market which I did. The $APC buyout around this time really helped that out.

From May into late June I stuck to my trading plan but my setups just were not working. All traders go through these stale periods. I could have probably looked for more day trades during this time but I was being extra cautious during this period so I just stuck to my plan and didn’t really change anything. Its important to stick to your plan during these phases. Changing methods can cost you dearly.

July into August I had a phenomenal month. I closed out 33 trades this month of which 27 were winners! One of my best trading months ever as well as some of my biggest days. Everything during this period was firing on all cylinders and I felt confident again. I used caution September through December this year to hold on to my gains and eventually slightly beating the market by year end!

What I Learned as a Trader in 2019:

                I learned a few big lessons in 2019 that will stick with me for the rest of my trading career. I think the biggest lesson out of all of it though is to never carry a bias. I already knew this from years past but it was my own ignorance that killed my performance in the first few months of the year. The 2 big losses from $AAPL and $BA were completely unavoidable and I can’t fault myself for that. It was what I did after as a trader that allowed me to overcome the situation. I could have probably handled the situation a little better than I did, but that is why I’m writing it down and reviewing it here. So next time when disaster strikes (and it will) I can handle the situation with a little bit more experience and insight! As for the second half of the year I couldn’t be happier with the way I performed. I banked about 25% gains in that period of time and I think that is one hell of an achievement considering the circumstances, my full time job and other personal issues I was dealing with at the time.

2020 Goals:

                I pinned these goals to the top of my Twitter. Let’s review them again. For me I want to make 2020 about consistent month over month profits as well as trying to make each month a profitable one. I think my trading has got to the point where I need to really start trusting absolutely every instinct I’ve developed as a trader and really grind into what I know and executing on it with confidence. I want to achieve a year where I absolutely crush the performance of the overall market. I’m confident I have the skills to do it!

The goals:

• Streamlined consistent month over month profits.
• No Red months. Profitable 12 out of 12 months.
• $50K+ Gains for the year of 2020. ~$4K a month average.

I think its very important as a trader to be completely honest with yourself and define what you want. Trading isn’t easy, but if you’ve got a plan you can make it a whole lot easier. I encourage you to review your year just as I did and make the necessary changes in order to become the trader you want to become. For myself I want to do this professionally and I wont settle for anything less than that!

                Thanks for reading another one of my blog posts.

I want to dedicate this post to my grandfather! Thank you for a life time of amazing memories, all of the encouragement over the years and most of all for being my number one fan! I know you would want nothing more than me to continue to kick ass in the markets. I promise you I’ll get there. My fucking word Grandpa!