Something that I see on an ongoing basis is retail traders diving full-on into a new strategy, immediately failing, and then hopping onto ANOTHER new strategy and repeating the experience. Instead of having ten years of experience in trading, most retail traders get one year of experience ten times, and it’s not additive.
It’s frustrating for the trader since they never seem to get anywhere. Sound familiar? It should, I went through this exact pattern myself. I knew dozens of different options strategies, could employ about a hundred different technical indicators, and knew how to scan through thousands of stocks. I knew a little about a lot of things. Trouble is, I wasn’t making any money.
And then I did something which was to become the tipping point for me - I stopped trading everything. I closed every open position and hit the big red “reset” button.
I resolved to do NOTHING until I could define ONE chart and ONE strategy that I would master. Just one. If I could not get one strategy to work on one chart, then multiplying the complexity would not help.
And it worked. In no time I had settled on the SPX chart and the iron condor; this combination seemed to give me the best chance for success, and it wasn’t but six months later that I turned in my two-week notice. Once you really get behind something and go deep, I found that I had no choice but to burn my bridges and go solo.
So if you have already found your “one thing,” then how do you go about “earning the right” to ramp up your capital?
Something that I advise new members of the Daily Target 100 trading room is to start out with a simulated trading environment. Learn the MECHANICS of the trade; how to enter, how to defend, and how to exit. If you can’t get this to work in a sim environment, then wasting live money won’t help. Commit to perfect mechanics before you move on to live capital.
And when you go live, consider just trading one contract. Even if you have a larger account, and ESPECIALLY if you have a larger account. Create a business plan for yourself and identify performance metrics that you must meet before you increase position size.
Earn the right. Be methodical. Find your one thing and specialize in it. That’s the only way that I know of that actually works.
In your corner…Doc Severson
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