Learning to trade is quite a journey. Taking educational courses, backtesting, virtual trading, and journaling all while trying to juggle a nine-to-five, family time, and personal time can feel a bit taxing at times, but we love it, right? I mean, I would hope so. There is a lot of sacrifice that goes into this adventure and I’m not sure how anyone could persevere through the trials and tribulations of the trading learning curve unless they absolutely loved the idea of trading. There has been plenty of times that I’ve asked myself why I continue to trade when I felt like such a failure. Deep down I knew I couldn’t give up. I knew that something was wrong with my trading system if I felt this way. I knew something needed to change if I wanted to continue to trade for the rest of my career. I had to come up with a trading plan that I absolutely loved. So that’s what I did.
First thing I did was quit griping about how the market hates me and wants to see me fail. Then I put my butt in the seat and got to work. I reviewed my journal to find my strengths and weaknesses and found problem number one there. My strengths were theta based trades, which ironically enough is not what I would consider my favorite trading style. Theta bored me to tears but was holding my account together so I had to be somewhat appreciative. My weakness was delta trades which is where I felt my heart truly belonged to. I like the action and excitement that delta trading provides. It’s what most people think about when they think of trading: playing direction, hitting home runs, bringing in the dough! I loved that idea, but I didn’t love my approach to it.
So I backtested different delta systems. I tested multiple rules on option deltas, days till expiration, conservative versus aggressive entries, aggressive stops versus conservative stops versus no stops, management rules, profit-taking rules, and exiting rules until I found a set of rules that I believed in so much that win, lose, or draw, I was going to love the system I created. Now instead of dreading the opening bell, I’m excited every day because I know I love what I do from theta to delta.
I think a problem with a lot of unsuccessful traders is that they don’t have a system they love. They may have taken a course or watched a video about a trading concept and they tinker around trying to make a little money doing what someone else has told them to do but they find themselves frustrated because they don’t truly love how they are trading so they break rules and end up losing or breaking even. For so long, I just couldn’t understand why coaches would be doing a show about a trading concept and would suggest different rules you could do instead of just saying, “Do this!” But I understand why now. How is someone supposed to find what they love if they just follow what someone else does?
You need to love your system to the point that you trust it unconditionally. Challenge yourself. Go through each of your rules and make sure they fit you. Find a system that even if you lose, you’re ok because you have stress-tested it and have proven it profitable in the long run.
Keep at it team and love what you do.
Justin started his trading journey during a 3-day workshop with Tim Justice in April of 2018. He has always been interested in the financial markets and the opportunity it potentially provides. He likes trading stocks and options. Outside the markets, he’s a husband, father of two boys, and full-time automotive technician.
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