WWURD? What would Uncle Ryan Do?
I want to look for opportunities today.
My current balance is mine. I have no extra money to lose from a previous win and no money I need to win back from a loss.
What happened yesterday will inform my trading so I can make better decisions today, but it will not dictate my choices. Today is a fresh start.
Now that I have reconciled my balance, I am ready to prepare my mind for a day of quality, thoughtful decision making.
I want to find opportunities, but I do not need to. If the opportunity presents itself, according to the criteria I set, then I will consider a trade. If not, I will not.
I cannot control the market, the patterns I choose to look at, or the direction that price action wants to go.
I can control the quality of stocks I look at, the accuracy with which I analyze those charts, and the risk management and responsible position sizing to turn the probability of trading over time from being a losing hobby into a profitable career.
I will only look at a few stocks, not a thousand. I know that there is an opportunity on every chart every day. I just need to do a few things to turn the edge in my favor.
I know that spending time on quality stocks over quantity immediately puts me at a huge advantage over other traders and my own limitations before I even look at a chart and I need every edge I can get to win a probability activity.
Carnival barkers are masters of probability. They devise an entire business model around standard deviations and the probabilities of success over time.
Trading is the exact same model. We are trying to regulate our process as much as possible, sans emotions gimmicks and fads, and other uncontrolled external stimuli and influences so we simply take more people’s money than they take of ours over the long haul. Truth.
I know I want stocks that perform better than others. I can use a Perf chart for this.
I know I can choose stocks whose sectors are rotating for a rally. I can use an RRG chart for this.
I can read on SeekingAlpha, Investor’s Business Daily, or other publications to find out more sentiment about sectors and the market.
I will read twitter if I have people I can trust.
I will not accept blind public watch lists from people I barely know. Curating my own lists is a developed skill and every public list I take is taking one big step backward from getting me to my goal of independence. I know I learn more from my mistakes than piggybacking on other’s victories any day.
Every stock I pick myself and follow through to see how my predictions and planning worked out moves me one step forward, whether it is a winner or a loser and it going to be more tuned for my mind than someone else personal picks to match their mind.
Only with my own trades can I have the invaluable and very expensive feedback from a successful (notice I did not say profitable) trade I executed on my own.
I will let news, social media, articles, and opinions on the market inform me.
I let other people’s emotions and opinions help me to form a plan to take advantage of their sentiment. I do not allow their sentiment to form an emotionally instigated opinion within me.
I am a wolf, not a sheep.
Once I have selected my stocks, I will put them in a list. I will pull each up on a long term and short-term charts, such as a daily or 65M and a 15 or 5 Minute.
I will add some moving averages, trendlines, anchored VWAPs, or other indicators. I will only put things on my chart that help me make money. If it does not, I leave it off.
Once my charting is done, I will check catalysts like earnings, analyst’s sentiment to see how it compares with my findings. If I find a good pattern that may be setting up in the week, I will set alerts. More is better than less, but they need to be accurate.
I want to get in early or after a pullback, never on an initial big move if I missed it. I do not chase. I do not buy tops. I do not buy it without confirmation. I want any indicators angling up if I am going long. I want that magic 3 some: RSI bouncing off 50 or exiting oversold. Stochastic < 45 and angling up with a cycle low, and a MACD bullish cross. This will keep me in more good trades and less bad trades and that is all I need to be consistently profitable.
I will add more indicators if I know them well.
If I feel like I need something new today, then I need to stop trading, take a few minutes to read an article or watch a video on it, then try to use it as an informed trader trying to analyze the effect of a new technical tool on my chart, and not a cliché chasing shiny objects every time I get a notification for something I have not heard of.
Everything I pursue will have a “why” to answer at the end of it. If I do not know what I am looking for then I should not be looking for anything. If I am lacking in something, then I pursue that solution. I do not go off looking for solutions for questions I am not even asking, or I will be in the question line for the rest of my life.
I know most things I can pursue and spend time on, on any given day are likely not better than what I am already working on. They are different at best. The classics last and I know that reinforcing those skills will get me closer to my long-term goal than almost any other thing I might distract myself with.
If stuff is good, it is well known and easy to find. If it’s a secret, it’s probably not a good one.
Trading is not about knowing what others don’t. It’s about making better quality decisions than the other person and that only comes with criticism, analysis, scrutiny, and a lot of repetition and time, but not repeatedly doing things incorrectly without adjustments thinking something will change.
I know that every trading decision I am making from the moment I wake up the moment I go to sleep is working toward my goal of what and how I want to be trading in five years, not in 5 weeks.
I will not get married to stocks. I will not study gimmicks or memorize setups all day. I will focus on educating myself on technical analysis that will empower me to trade anything I want for the rest of my life. I want skills that work on many charts and many setups and many years. Not something that may last a week or a month and then I must find the next trick.
I must let my winners run and cut my losers with no hesitation if I want to win the long game.
Long-term goals are made by the accumulation of many small quality decisions. I must be critical in everything I think about spending time on so it is not only not a waste of that time, but not doing permanent damage by instilling bad habits I will not be able to break.
More trading does not mean more learning. I learn by analyzing my trades and to do that I must have meaningful trades. If my trades are random or too quick in the moment, then they are likely not in my plan and I am not making good decisions.
I should be able to defend any trade I take to anyone at any time.
Now it’s time to take stock of my day. I had a plan. Did I stick to it? Why not? Where did it go off course? Do I need to work on my stock selection? Did my charting not pan out and my alerts did not trigger correctly. Did I take trades off of my list? What would have happened if I stuck to my plan better? Why did I enter? Why did I exist? Why am I even looking at this ticker? Is there something better or did I fail to find the correct entry? Did I position size correctly? How were my stops? Did I guess a profit target and did it get there? What is the story of my trade and where did I get lost and where did I get found? Where must I make changes?
I must identify what did and did not work and why or I will never make progress. If my plan needs work, then I work on my plan. I cannot just go through the motions of trading and expect to get better. I must make small decisions to make progress and in time, I will – because I accept that this is a long road. And the best week of my life is often followed by the worst. Big wins usually follow big losses. That is a probability. We are honing a skill for a lifetime and we must play the long game every day.
I know that red days, stress, struggle, unexpected news, getting stopped out, and sometimes losing money is part of this career I chose. I will work within the confines that are required of me, to the very best of my ability. I will never expect more than I am capable of but will always strive to be capable of more.
I will identify as many opportunities to celebrate small victories, having absolutely nothing to do with profits, that will keep my emotional tank full for the journey ahead of me.
I am the best trader for my money in the world. I know my risk tolerance, my greed triggers, my weaknesses and strengths, No one else’s trading is my own. I will only surround myself with people who empower my independence, support me especially on my worst days and give me advice from lessons they have learned, not ones they preach that I must learn. I make the decisions for my own success and I accept that challenge knowing that even my worst personal choices early on are probably better than someone else’s good ones if they are not mine – and they most certainly are the best choices that I can shape to help me become the one and only unique trader that only I can forge.
Hopefully with a little help from some friends. And when I am not sure, I just have to ask.
What would Uncle Ryan tell me to do?
The good news is, tomorrow I get to try again.
Good Luck. Be Safe.