Some Thoughts On April And Moving Forward

I'm not really a guy who looks back on my earnings trends with any kind of regularity. Actually, I normally only check my "sheets" when I think an error has been made.

But tonight, since I barely traded today, I thought I would take the time to look back on the year and attempt to set a couple of goals for May.

Trading is about making money, yes, but I also am the head of a household here, so I need to think about my sanity. So, what kind of win/loss ratio would make me enjoy this job? Ideally, something like 90%. But, that's a little out of reach right now (I'm talking on a daily P&L basis).

In April, I was positive 68% of the time, roughly 2 out of every 3 days traded. That's okay. For May, I'm going to do something unprecedented for myself and set a GOAL. I'm going to shoot for a 75% win rate, that is, be positive 3 out of every 4 days traded.

Another thing I realized about April is that I had a couple of blowup days. You'll recall that one day, I lost $1889. That was awful. In the last two months, since I started trying a new way of trading, I'm averaging about $200 a day... so I wiped out about 10 days of work with that there blowup... frigging awful.

Since I'm not trading nearly as much as I used to, and definitely with less emotion and spontaneity, I'm going to set myself a daily loss limit of $600. And I'm really going to try hard to stick to it... without any large blowups, my monthly P&L should improve.

Finally, I've averaged $200 a day with this new system trading in lots of 200 shares mostly. I'm going to try and average $300 a day in May and up my share size again. There are 21 trading days in May, so I'll just say my goal is to make $6000 for the month. That may be somewhat ambitious given the Memorial Day holiday, but we'll see.

I'm rebuilding. Honestly, I didn't think it would be so hard, but apparently, it's a slow process.

Finally, I'm still trying to reconcile how to deal with events like the S&P upgrade of Brazil today. I want to be in on those trades. Today, I missed the news, so I can't fault myself too much. The way I'm trading now, basing daytrades on daily chart price action coupled with intraday setups is a great way to trade day in and day out, but it will almost always miss the odd event. For as long as I've been trading, the "odd event," be it the California power crisis or the subprime news of last August, has been a reason to trade aggressively.

So ultimately, I want to keep my daily sanity by trading methodically, making the game profitable and boring, but leaving the door open to insanity... that is, not be too strict with myself that I don't jump on opportunity when the market is screaming. I'm still working on this...