Develop Your Own Strategy
You must still find your own place in the market. I may be a 1-minute or a 5-minute trader; you may be a 60-minute trader. Some may be daily or weekly traders (swing traders). There’s a place in the market for everyone. Consider what you are learning in this book as pieces of a puzzle that together make up the bigger picture of your trading career. You’re going to acquire some information here in this book, you’re going to pick up some other information or knowledge from your other reading and research, and, overall, you will create a puzzle that will develop into your own unique trading strategy: “your edge”.
In addition, for every strategy you develop for yourself, make sure you give it a “name”. If it is a new strategy, coin a name for it! Having a name for a strategy gives it an identity, and that helps to prevent you from trading without a plan. If you cannot identify why you are in a trade, and which strategy the trade belongs to, very likely you should not be in that trade
.
In our chatroom, whenever I enter a trade live in front of our traders, I say out loud the name of the strategy I am planning it on. This is important to me as it ensures I am not jumping into a “strategy-less” gamble without any plan. You will hear me all of the time say out loud things such as: “I am going long CCL for a 1-minute Opening Range Breakup with a stop loss of below $11.50 below VWAP.
” I may get stopped out, and the trade may not work for me, but at least I know when I enter a trade that I have a viable strategy set forth, and so should you for each and every one of your trades.
I don’t expect everything I do to work exactly the same for you. But my goal in writing this book is to help you develop a strategy that is going to work
for you, your personality, your account size and your risk tolerance. Please contact me in our chatroom at
www.BearBullTraders.com
or email me directly at
andrew@bearbulltraders.com
if you think I can be of any help. I try to respond to all emails in a timely manner, especially if I am not traveling or climbing!
Later, in Chapter 9, we will examine the case of a recently successful trader who was also a reader of an earlier edition of this book. What is fascinating about this case study is that the trader learned the basics from my books, but he found his own edge in the market by working hard and putting the requisite time and effort in. He trades completely differently from me. He has his own set of rules and has defined his own strategy, and they are not what I myself trade or teach. He has developed one very different strategy for himself
.
I hope you find this case study useful, even inspiring, as you grow as a trader. In your early days of trading, the key is to master one strategy.
You can start casting out later, but first you need to master just one strategy. It can be the ABCD Pattern, it can be the Opening Range Breakout Strategy, or you can create a strategy of your own.
It is absolutely critical for every trader to be trading a strategy. Plan a trade, and trade the plan. I wish someone had said to me when I first started training,
“Andrew, you need to trade a strategy. If you’re trading with real money, you must be trading a written strategy, and it must have historical data to verify that it’s worth trading with real money.”
You cannot change your plan once you have already entered the trade and have an open position. As I just mentioned, you also need to have a name for your strategy. Give it a name! When you name a strategy, it means you are able to identify it and you know its criteria.
The truth about traders is that they fail. They lose money, and a large percentage of those traders are not gaining the education that you are receiving from reading this book. They’re going to be using live trading strategies that are not tested or do not have proper criteria, they will just be randomly trading a little of this and a little of that until their account is gone, and then they will wonder what happened.
You don’t want to live trade a new strategy until you’ve proven that it’s worth investing in. You may practice three months in a simulator, and then trade small size with real money
for one month, and then go back to the simulator to work on your mistakes or practice new strategies for another three months. There is no shame in going back to a simulator at any stage of your day trading career. Even experienced and professional traders, when they want to develop a new strategy, test it out in a live simulator first.
Your focus while reading this book and practicing in simulated accounts should be to develop a strategy worth trading. Remember, the market is always here, and it’s only getting more volatile and more liquid. You don’t need to rush day trading. A day trading career is a marathon and not a sprint. It’s not about making $50,000 by the end of next week. It’s about developing a set of skills that will last a lifetime.