From the Journal of a Stay-At-Home Trader: Struggles on the Journey
As a short-term swing trader, things have been tough for me lately. Although the overall market has been bullish, I think there is a tenuous edginess to it all. A position in an individual equity can be up one day, significantly down the next two and then come roaring back after that. It has been hard for me to catch a wave (i.e., a trend) because as John likes to say, “It’s so choppy and sloppy.” For me, that translates to “The surf’s not up.”
Current market conditions have really gotten me thinking about what I am good at and not good at. I won’t call them my strengths and weaknesses, because “what I am good at” is not exactly the same thing as a strength. Similarly, “what I am not good at” is not the same thing as a weakness.
See, the way I look at it, a weakness in this context is something that can be strengthened through study, practice, perseverance and lots of good, old-fashioned hard work. It is similar to one’s muscles getting stronger through focused weight training. However, “what I am not good at” is not a weakness that can be strengthened. Rather, “what I am not good at” is just recognizing and accepting my trading personality traits or propensities.
Let me explain myself.
John has been saying a lot lately that this market is a day trader’s paradise. Hearing him say that can put tempting thoughts in one’s mind: “Maybe I should take some day trades. Maybe there is easy money to be made there, and maybe I should be taking advantage of it.” But I’ve been able to fend off those temptations when I think about what I am not good at. Simply stated, I am not good at day trading. I do not have the killer instincts to pull the trigger without hesitating. I do not have the mental speed to place trades that quickly. I do not have a steely stomach for explosive moves in the underlying. And frankly, most of the time, I don’t like straight calls and puts; I want to be hedged. No amount of study, practice, perseverance or hard work is going to change those things about me. In other words, those are not weaknesses and thus cannot be strengthened.
However, there are indeed weaknesses that I have strengthened — skills I have attained — through hours and hours of study, practice and hard work. So even if the market is what it is right now, I have to remember how far I have come in improving those weak areas of mine: technical analysis, reading short-term momentum, the Greeks. I have been able to overcome these weaknesses with the help of my personality traits. My attention to detail helps me examine closely the different strikes and expirations. My desire to put on the best trade I can drives me to find at least three ways to trade a chart that I like. My deliberative nature leads me to figure out the exact position I want to have on, with the Greeks that suit me best. And my awareness for risk has led me to become good at walking away from a trade that I would have liked to take but that had some stars that just weren’t lining up (as Dan likes to say).
And thus, even though this market is not my personal paradise, I will continue to persevere in honing the skills I have developed with the help of the strengths of my personality. And when I find my own trading paradise, whether it is in an individual underlying or the overall market, I will be ready. “Patience, young grasshoppers. Patience.”
By A.K.
