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2019: Sticking with What Works

2019: Sticking with What Works

I hope you had a jolly and restful holiday season.

We have a new year upon us.

Although this moment is really just another moment in time, there is something unique and powerful about changing our calendars and going back to January — month number 1.

It’s a good time to reflect on the past year. And based on the information we gather through that act of reflection, we can set an intention for this new year, one that is informed, process-driven, and result-oriented.

On my end, 2018 was a good year on the trading front because I can confidently say that I did everything right. I followed my plan, I did what I was supposed to do, there is no regret in my mind, no ‘if only I had…’, and no ‘what if…’

Yet, despite that, I ended the year with a negative performance.

So what happened?

The market happened. And it did what it does best… it’s good at lulling you, and then, right when you least expect it, it pulls the rug from under you.

In this case, here’s how it happened.

First some context.

I trade two different trading strategies on two different trading accounts.

In my bigger trading account (which I’ve nicknamed Account A), I trade a systematic strategy on the weekly timeframe. This means there is no discretion involved… I get a signal, I get in or I get out.

As we all know, in the last part of the year, volatility made its comeback and since the indicators that make up this strategy took some time to turn bearish, I got quite a few false signals to go Long.

Now, in my smaller trading account (Account B), I trade a part systematic, part discretionary day trading strategy. (The entry is systematic but the exit is discretionary.)

This strategy has been doing really (REALLY) well in the past couple of years. It has generated few false signals… and the recent downturn? I rode the SPY all the way down to its current level.

Compounding both accounts, A and B, during the first half of last year, my performance shot past 50%.

But now, since account A is in a drawdown (close to -20%) I’ve forfeited all profits for 2018 – even though account B ended the year with a performance well over 80%.

That’s because Account B is a smaller account, so when averaging both accounts’ performance I’m still down for the year.

This is not too bad because I’ve been profitable every single year for the last couple of years, with 2013, 2014, 2015, and 2017 being outstanding years for me.

So I’m not going to complain.

Trading Business Performance.

If you’re a regular reader of this blog, you know that I like to urge you all to view trading as a business composed of the actual trading AND some side ‘income-generating activity’ that allows you to live off of your passion – which is trading.

In my work, I don’t sugar coat things for you. I tell you things as they are. The reality of this business is that there isn’t a “holy grail” trading system that wins all the time.

It does not exist!

The key to the trading conundrum is you! And it’s the mental, money, and risk strategies that you employ and that allow you to weather the short-term vicissitudes inherent to this field.

So my trading performance aside, my other income-generating activities have been doing pretty well.

  • My course and book sales are slowly increasing… and I’ve also been working on some major updates for one of my courses.
  • I’ve had the pleasure to work with a high net worth retail investor… I followed him for a few months, coached him, and it’s been super gratifying to see his progress and witness the changes.
  • I tried my best to be consistent with my blog posts.

Needless to say, the stream of income generated through these different means alleviates a lot of the pressure that naturally arise when you’re trading for a living and your strategy is just not responding very well to the current market conditions.

My goals for 2019.

It’s very simple: I will strive to remain consistent and I will keep doing what has been working for me the past couple of years.

My trading strategies work. I have no doubts about that. I’ve been trading them for years. Over many, many trades, the expected result for both strategies is net positive.

But make no mistake: They’re no Holy Grail trading strategies. Like any viable strategies out there, they just make sense mathematically, but, to work, they rely on discipline and a dose of luck.

So this year, while I can’t fully control the “luck” variable, I’m ready to play my part well, just like I did in 2018. And we shall see.

What about you? What are your intentions for this new year?

As this new year begins, you probably have a lot of things that you want to accomplish.

My advice for you: shoot for consistency.

Work on it.

Let it be your whole world.

Let that intention shape your thoughts.

Let it mold your actions.

Let it shape your character.

With that said, I wish you an amazing 2019!

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Yvan
I've been trading for a living since 2006. By merging mindfulness (an in-depth study of the mind and its tendencies in the present moment), a good trading process, and an efficient business practice, I went from being a losing trader to a consistently profitable one. Through my work here at Trading Composure, I aim at helping you do the same.
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