I thought it would be a good idea to evaluate how my strategies did this week. For those of you who have read my blog or any of my articles know by now that one of the things I think that is imperative for a new trader (or any trader for that matter) to do is spend time every day/week going over the day's/week's trading action. It is only by doing this simple, but mundane task that allows a trader to identify weaknesses in his/her trading techniques and mental toughness. Yes, I said mental toughness. With all of the many distractions in our daily trading world, it is easy to let small news stories or worldly events skew our take on how we trade. Therefore, the only way to counteract those influences is to constantly evaluate the performance of how we are trading.
Ok, I'll get down off my soapbox for now. On to the weekly wrap-up. First, many people who read the title of this article might start out thinking "Here he goes; he is going to try to sell me something." I don't blame you. Many of the ads you read always start off by showing you some big, spectacular numbers and then give you a sales pitch at the end. I assure you that this is not the case here. Every strategy, trick, and nuance to trading that I have learned over the last 20+ years in this business is ENTIRELY FREE!!! Why, you might ask? First, trading is hard to master and there are so many "gurus" out there selling you everything from options, to stocks, to forex that it becomes confusing (you are probably saying, you don't have to tell me because I have tried most of them.) Well, don't feel alone. So have I. Don't get me wrong. Many of these gurus have great ideas and I have learned much from them (usually for a great cost). The bottom line is that it is my hope that you can take much of the information that I have learned over the years that I share in my blog and use it to become a better trader, ALL FOR FREE. The second reason is that to be honest, the tips and strategies that I learned on free sites has been more informative than most all of the so called sure things I paid thousands of dollars for.
We had a good trading week. There were 22 valid trades. 18 were winners. 3 were break-even and 1 was a loss. Since my objective on each trade is 2 points and my stop loss on each trade is 2 points, you can calculate how much my strategies would have made last week if you took all trades. Each point on the Russell 2000 is worth $100. There were 18 winning trades. 18 times 2 points = 36 winning points. 36 times $100 (the value if each Russell 2000 point) =$3,600. There were 2 break even trades. Once a trade is up a minimum of 1.50 points without making my objective, I move the stop to break even (the price I entered the trade). A side note about break-even trades. There are times that a trade is up 1.8 or 1.9 points and goes down to stop me out at break even. Then it takes off in the direction if my original trade and makes my objective. This is frustrating, but I have seen trades that are up 1.80 to 1.90 points that have turned around and stopped my out for my full 2 points stop loss. Those trades are harder for me to take. I once knew a trader who referred to that as psychological capital. Psychological capital is a term used to describe how your mind reacts to how your trades preform. If you are up almost 2 points (almost $200) and end up losing 2 points ($200), that trade takes a toll and uses up some of your much needed psychological capital. In many ways, preserving your psychological capital is as important as preserving your REAL capital. It let you take trades more confidently.
There was 1 loss. As I said, my stop loss is 2 points. 2 points times $100 per point = $200 loss. So for the week, my winning trades were up $3,600. My 2 break-even trades cost me nothing except the cost of commission and slippage and my 1 losing trade lost $200. So my strategies were up a net $3,400 for the week. As I have discussed in other articles, the margin requirement I feel comfortable with for 1 contract is $5,000. So if you were trading a $5,000 account and made $3,400, you would have a very nice return. Can that be done? Absolutely! If you are just starting out, it may take you some serious screen time to get to that level. The only way to get to that level is to read as much as you can and watch to see how the market reach to various scenarios. For more information regarding these strategies and to have my daily wrap-up commentary e-mailed to you daily, go to