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Green Or Red: How To Handle A Streak

Another week, same streak.

Benzinga · 05/08/2020 18:00

Another week, same streak.

After the stellar results I saw through all of April, the superstitious part of me was worried I might lose some of that magic heading into May. Luckily, it seems like I’ve gotten into a pretty outstanding groove with my day trading, as the first week of the new month has continued the trend of great, high-quality setups and staggering momentum.

As of Thursday, I’ve already posted $37,000 in gross profits for May. That brings my total for this 26-day win streak to almost $130,000.

For those not following along with my daily trading recaps on the Warrior Trading Facebook page or Youtube channel, I’ve mainly attributed this streak to scaling back my share size so I can be more nimble with trades and better manage my risk. That’s not to say I haven’t been given some fortunate setups that work well with my strategy, as happened with my $11,600 trade in ION Geophysical Corporation (NYSE: IO). But my trading really turned around when I started taking smaller size, something I’m happy to keep doing if it keeps working.

I’m trying hard not to take this streak for granted, but I also understand that different traders can have wildly different experiences in the same market. While it may be one thing to hear me talk about the strong momentum I’m seeing, other people I hear from, many of whom are using the same or a very similar strategy to my own, might be stuck in a rut. In that case, I’m not much help to them if I keep saying I’m going to stay the course.

And while I can’t offer universal advice on how to turn around a run of red days, I can say that changing up my approach to the market has been a huge success. One really simple way of getting a new perspective on the market is to investigate new trading software and tools and experimenting with new indicators or screener metrics. Most platforms have some trial period, so don’t be shy about testing out something new.

Additionally, setting tighter stops on your trades is a straightforward, although somewhat blunt, way of managing risk. A more proactive step would be reviewing your trading metrics over the previous few weeks and keying in on particular price or float characteristics that you’ve found the most success in.

Ultimately, the best way to get over a slump is to simply keep going. Rough patches eventually smooth out, it just takes caution and a fair amount of persistence to make it through.