Coming off a great month in September, October showed a lot of promise early on. Unfortunately, within about 7 trading days things started to leak toward the downside.
In fact, it almost seemed like a switch turned off and the markets became a lot harder to trade. A significant amount of my trade ideas failed to follow through. The good news is, I was able to recognize the market conditions changing and adjusted way better than I did in August. Last earnings season is when I hit a low in my gains. I didn’t adapt quickly enough and I paid a steep price.
Although I lost a nice chunk of my early October gains, I was able to fight back late in the month and grind upward.
My plan was to increase share size somewhat, but not only did I not do that, but I also traded way less per day. I was very patient with my trading for the most part.
I had one of my biggest trades ever this month, which really got me out of a hole. If I can find two to three trades like this a week, I’ll be well on my way to making decent money in the market.
Although NNOX in October was my biggest trade of the month with a gain of $524, it was also the month I got stuck in that BA trade and never got my money back.
My biggest loss was just over $200 on one trade, but I traded it three times and lost over $500. This is the moment where I knew I needed to stop trading the crappy stocks and really focus.
Market bias on the street. If you remember the movie Let it Rid, Richard Dreyfuss, goes around the track and asks multiple people who they like in the horse race. He immediately crossed off the horse until he found the one no one mentioned.
Market Conditions – Two things can happen based on what you hear on the streets. People are starting to get scared and are selling shares, people are holding feeling confident and will wait out some of the big dips and volatile price action.
Point is, you can’t always listen to what others are saying. Based on my history, when I hear more of one than the other, we most likely do the opposite. Currently, I’m hearing way more people saying they will hold on to their long term positions vs, trimming or taking some gains. To me, this tells me we have more legs to the downside.
The first week of November should be quite interesting.
Side Note – I finished my Tradestation Review so be sure to check that out.
Goals for November
There is one major event in November that everyone is talking about. My Birthday. Just kidding. The most ridiculous election of my life is set to kick off the day after my birthday. I will most likely be asleep before everything kicks in. No matter what happens I will trade accordingly.
The number one goal in a volatile market is to manage your risk and press the buy button when things setup. I will not force size on my trades during the first week to let things die down.
I will look for the right opportunity to increase share size to help get even bigger gains. For now, I’ll remain a bit defensive and make the most out of my current share size.
I started working with a buddy on Zoom every day. We’ve helped each other out a lot so far and I’m really hoping we can keep growing as traders. We’ve built a pretty strong friendship in a short period of time, but that just shows you that trust and passion for the same thing make it a lot easier.
We start voice chatting around 9:20 AM just before the market opens and remain on Zoom until the end of the market day. Although we take breaks this has helped us get in some tough trades, stay out of some crappy trades, and really focus on getting better.
Since we just started a week or so ago, I’ll have more information about this in the November update.
Stay safe out there, manage your risk and I’ll see you after the grind.