Traders Edge

Growth/Drawdowns

Better Trading: Know the stock. Know it’s peers.

Excellent example today as to why it’s important to stay on top of related peers when live news drops.

AirTrunk IPO delay news hit Bloomie at 3.06pm…the really switched on players knew (or quickly found out) that SKS was in line for the engineering work. Given the debacle with Firmus and carnage to MGH there was only one way this was going to go. SKS started dumping on volume pretty well instantly. It had another $1.36 move in it by close.

SKS 1 min

SXE, one of the obvious peers (and one that had been performing pretty well intraday on broker target increases), didn’t hit new lows until 3.13pm. It dumped over 50c.

SXE 1 min

What else? The larger the carnage the bigger the net. TEA got attention. More diversified but by that stage punters wanted blood. New lows there at 3.18pm. 50c more in that by close.

TEA 1 min

GNP next. Even less closely related but definitely in the basket. Breaks significant intraday support at 3.25pm. It dumped another 40c.

GNP 1 min

Moral of the story?

1. Know your stocks…they are your tools

2. Don’t give up on a live news trade idea because you think you’ve missed your ideal entry.

3. Speed is key.

Other traders are working through the same process….beat them.

Just started trading? There are No shortcuts to success.

This game is definitely not an easy one, it’s bloody difficult to have continued success, or success at all. A small few are lucky, and find their niche in the market quickly. Some never will. Unfortunately the nature of trading with a limited stack of your own money means that, if you don’t find your edge relatively quickly, you’re gone.

I got lucky. I started full time trading right at the bottom of the bull market in the early 2000s. I started with less than $2000 and had my first 7 figure year withing 3 years. You basically had to just point your money at something and it went up. Today’s markets are tricky, and a different beast to back then, so I’ve had to continue to evolve over the years. There’s no guarantee I would have survived at all if I was just starting now.

Where do you start? Unfortunately, I believe trading books or videos can give you a good grounding, but they cannot give you a blueprint to successful trading, especially as a day or short term trader. I own most of them and I don’t think I’ve read any of them from cover to cover, but I do read a chapter or two every once in a while.

Neither will blindly following your favourite furu on X or Insta.

Hard work…and I mean hours upon hours to the point of obsession. Time in the market, at the coal face, and discipline. Real discipline. That’s it.

They are the vital pillars to possible success. There are no short cuts. No guarantees.

Good luck!

Alan McGrath
Traders Edge Community
www.tradersedge.com.au

Trade Independently. Grow Together.

A useful tool to help eradicate your trading demons

You’ve followed all the apparent big hitters on Twitter.

You’ve watched countless hours of Youtube videos on trading.

You’ve bought, borrowed or stole every trading book you could get your hands on.

You’ve opened your first trading account and followed all the steps you’ve decided were the keys to success.

You’ve taken all the best signals.

…. and you’re still losing.

Finding your edge takes hard work, perseverance and often luck. But often what is holding you back is not the trades you’re taking, but an internal road block that is causing you to make recurring errors. You could dive deep into your own psychological DNA to find the root cause, but I think a better way to approach this “witch hunt” is to track them down in your actual trading results.

Tom Dante’s (@Trader_Dante) Demon Finder spreadsheet is a fantastic template to help you identify if you have an aspect of your trading that is consistently damaging your trading results. There have been several versions of this over the years but below is one of the originals:

Add or remove potential Demons according to your own personal experience and be vigilant and honest about checking a box EVERY time you make an error.

Once it becomes obvious where your most dangerous demon is lurking, then do everything you can to take this out of your game. Once you feel you’ve achieved this, then move onto the next. (Suggestions on how to correct these errors is one of the subjects often touched upon in our subscription community live chats)

This “slay your demons” concept is not unlike the inchworm process that Jared Tendler (@jaredtendler) covers in his excellent book, The Mental Game of Trading. Well worth a read in my opinion.

20 plus years on and I still use a version of this process, but mine is pretty simple now. Tacked to one one of my monitors is a piece of paper that simply reads “Don’t be shit Alan!”.

Once you’ve learnt how to trade, for me, everything else ever written can be summarised in those 4 words.

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