End-of-Year-Review Year Three 2022

The Rollercoaster and Comfy Sweater

The year started great, was up about 40% on my starting capital, and improved on my higher timeframe S&R trades & Asian Session Breakout trades, adding to them, and holding them for some good scores; but then I started to get too eager to size up, to trade different strategies & experiment, taking hopium trades, and I watched as that 40% dwindled to about 7% up on my starting capital for the year. Not horrible, considering this was my first green year trading, but also not ideal.

A few key problems for me were too many consecutive losers, too many trades in general, and taking too many shit trades & substandard setups.

If I’m facing 8 losses in a row at size, my resolve and trading account can’t handle it, which alone told me the size was too big; altering my comfort levels in a bad way and not in a positive challenging way as I initially thought it would. It’s why I ended the year up with over 2900 pips, but only a few hundred in profits. Getting beat down and in the hole, only to then size down and do well, has been a disaster for me.

Another problem I had was taking too many shit trades & substandard setups. Just getting sucked into the market, or some news event I didn’t properly plan for, or trades not within my setup. I took well over 100 of those types of trades (mostly in the first four months), sapping away my profits. Part of the reason for the increase was becoming more disciplined and selective, ironically, so, anything not disciplined and selective stood out from the other trades and got defined as a shit trade.

It wasn’t until Kyle bluntly told me it was time to cut those shit trades out, and since that point, I pretty much have done that. I have only slipped up once over the past 12 weeks, otherwise, no more shit trades or substandard setups, that problem has been resolved – find a good trading buddy, it helps.

In more positive news, I was able to meet some of my third-year goals which included: improving my trade management %, being more selective in my trades, trading less, and sizing up.

At the end of my second year of trading, my rating on selective set-ups (as in only taking planned set-ups within my strategy and conforming to the rules in my trading plan) was around 85%, I got that up to 91% for the end of my third year, and 99.1% during the past 3 months.

My rating on trade management was around 56% at the end of year two, a lot of room for improvement there, but I was able to increase my trade management rating to 65% this year. Year-over-year, I am happy with this progress but need to step it up in this area moving forward.

I was averaging about 24.5 trades per week, leading to over 1200 trades during year two, way too many. While I haven’t been great at fixing this (1050 trades this year), I’m averaging 22 trades per week at the end of my third year; but only averaged 13.6 trades per week over the past 3 months. I believe that is more representative of where I am currently with my trading, and happy with the progress made there as well. While doing this review I noticed that a few of the weeks where I way over-traded (between 40-70 trades), they would be green, reinforcing a bad habit.

As far as sizing up, I went 8x my normal lot size on my biggest-sized trades and around 3.5-5x my normal size on average when I sized up. Again, this was going too fast for my sensibilities, so I started back down to $0.50 a pip right before summer, I’m currently at around $1.50. I’m sizing up slowly to use a consistent lot size so I don’t have that lot size discrepancy for when I do have winning streaks, and will continue to push in this area.

Some of my goals for year four will include getting my trades per week total below 15, increasing my trade setup rating to over 95%, increasing my trade management rating to over 78%, and ending year four with a base lot size of $4 per pip.

And that leaves me to my last part, the refinements done to my core strategy have matured to a point where I’m not taking more than 3-4 losers in a row, have massive confidence in reading the charts within the context of the strategy, found my edge in being able to pinpoint areas of liquidity to get in on with really tight S/L’s, have no desire to deviate, and found the perfectly fitting sweater for my patience levels, discipline, focus, fondness for day trading, and my schedule.

The main factor in finding that “comfy sweater”, is simply time in front of the screens and massive amounts of experimenting. Finally getting to the point where all that experience has altered the way I view a chart, finding my way to trade, and understanding the art form of trading over the mechanical/analysis part I was relying on for the first 8 months of the year.