December
27
27
New Year’s trading resolutions for 2008
Topics: UncategorizedThe books are almost closed on 2007, a frustrating trading year for me. Improving my execution and results in 2008 will take more than resolve, so I started early with my New Year’s trading resolutions.
- I will work to systematize my strategies. I’m a discretionary trader, and I intend to remain so. However, my trading could benefit from better defining, testing and documenting my strategies. In 2008, I will move my microcap trading closer to what Dr. Brett Steenbarger labeled “hybrid trading” in this May 2007 article. My plan is to adopt a system that plays on my strength — stockpicking — to develop a “pool” of candidates, and uses defined guidelines for entries and exits.
- I will keep better trading records. Looking back over 2007, I can identify weaknesses in general terms, but I simply lack the data to learn the most from my mistakes. That won’t happen in 2008. Each failed trade is a learning experience, and having paid dearly for that education, I’ll make the most of it.
- No sacred cows. Good records will lead to better testing, and more insight into the performance of strategies believed to be valid. In addition to my personal trading records, I have started to enter the stocks discussed in many articles here into Stockpickr portfolios, so you can track the results. Some are surprising. Stay tuned next month when I reveal a widely-held trading theory, one to which I previously subscribed, that doesn’t hold water.
- I will read fewer trading books. Reading time is better spent re-reading and trying to glean a little more knowledge and focus from the best trading books already on the shelf. You know the ones — you can tell from the dog-eared pages. I’ll still read (and review) a few new ones, but I want to go back to the half-dozen books I have already found most helpful.
- I will take myself out of the game if I am distracted. I don’t need complicated records to know that I make terrible decisions when I am physically exhausted or emotionally distracted. I will spend those days in 2008 from the sidelines.
What are your trading resolutions for 2008?
2007 was my first adventure into small and micro’s. I had a good longterm track record with large-caps ever since I began investing.
With small caps, I need to set clearer exit multiples and sell for gains. A 20,30% gain which I had and lost in at least a couple volatile small caps will probably be taken by me in the future, especially if the long-term story is at all cloudy.
I need to not over-analyze or second guess myself when my facts, intution and analysis is right. I bought JADE on the panic sell at $6 maybe should have sold at $8 or so or at least averaged down at the bottom in the $2′s. gosh this is looking like a great investment here as it just rocketed 53% after hours today. This also involves pulling the trigger. I missed a lot of opportunities.