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As A Day Trader I LOVE Volatility!

Yesterday was a good day for us because volatility spiked up big time during FED Chair Powell's speech at the Jackson Hole summit, which was roughly 30mins after the New York market open. Volatility is important because that is when the big moves happen and big moves provide opportunities for big profits. - And profits is why we are here.

As an overall it was a really good day for trading, fair enough volatility was low during the London open, but the market still gave us opportunities even during those "weaker" trading hours. We executed a few solid trades with WTI being the one that made us the biggest profit before the New York session volatility kicked in.

We were buying WTI and we shared the trade idea with our community, as we do with every trade we take. WTI was a setup which we scaled into due to the fact that volatility was down, we didn't want to go full exposure before we had concrete confirmations. We ended up with an excellent profit on the below 50 point move and we were ready to kick some ass during the New York session.

It's days like yesterday that make me upset the market is not open seven days a week, but then again we do need the weekend to improve, learn, re-focus, re-energize and get the necessary work done so the new week can be a success too.

Now, as I sit here with rain tumbling down on my window I'm thinking about my trading yesterday, the weekends are an excellent time to review your trading from the previous week and what I found during my review today is that there were things which I could have done better, specifically I wish that I had traded with more size, but I do have a few other things I should have done better and this is an important one: I realized that during the New York open (14:30 UK time) the market was not creating any clear move which only meant that Powell's speech could be a big mover, my regret is not focusing only on 2 assets, I have 5 different setups running and that killed my "concentrated attention" and it took me a good 30 mins to re-focus and switch my focus to only Gold (XAUUSD) longs.

Overall, I am very happy with my trading and can’t wait for the markets to open on Monday mainly because I've completed a major update to our trading system and I can't wait to have it active all week long!

Before we continue into the point of this blog post and since it is the weekend I want to share what I do on the weekends to become a better trader.


A quick lesson on improvement:

On the weekends I spend time thinking about how to be a better trader in the following week, here's what I did today that will help me be a better trader in Monday and the following days of the new trading week:

  • Since trading is is a fully mental game I like spending time doing visualizations via something I call "future pacing", I basically close my eyes and imagine myself doing ordinary things in extraordinary ways, like taking in one trade at a time and following the system, staying focused after taking a big profit or when taking a large loss, having a good day both in terms of happiness and profits, being aggressive on the right trades and the right times, being patient with my entries. Visualizing these events and actions helps me stay focused and educate my mind on what it needs to be doing Monday to Friday.

  • I didn't do this until recently but I started to love reviewing my statistics (number of positive/negative trades, average holding time, compounded trades, average gain/loss etc), but my favorite is just checking the history tab of my cTrader account and clicking on each of the trades, essentially reviewing what I could have done better with each of the trades. - This alone helps 10x my development as a trader.

  • Then when the review and visualization is done I start preparing my trading week, but I do that on Sundays, so tomorrow I will review fundamentals, charts for key levels/patterns and overall complete all the tasks I preach in the Primed Traders community.

That's pretty much it for my weekend work... I believe in cause and effect that is why my causes are excellent week in week out, and most of the time my results reflect my causes.

Now going back to the point of why volatility is to be loved and not feared.

It is nice to see that our hard work pays off, because trading can be frustrating when you're doing it wrong, but when you are doing it right it's one of the sweetest things in the world.

When you trade long enough you realize that there are days when trading feels like a grind and there just isn’t enough free money (volatility) out there, then there are days like yesterday when the "atomic bomb" kicks off in the markets and you have big momentum and movement. As day traders we pray for days like yesterday, volatile days. I’m not talking just about the profits we make at the end of the day (although they are very nice), I'm talking about the opportunities available to test our skills.

These types of days is when you can be aggressive, play the momentum and give the asset you are trading more room on the upside/downside than normal. Yesterday NASDAQ, XAUUSD and the USD made big momentum moves, trading any of these assets would have made you a killing if you just positioned yourself on the right side of the market and used a more aggressive position size.

What is vital to understand is that these types of days are not days where you can lose focus, focus is vital to a trader and when trading you need to be 100% concentrated on the tasks at hand, there can be no distractions, 100% focus gives you the opportunity to make bigger profits than you even did in a mere few hours or even mins.

Now if you get caught on the wrong side of volatility you need to understand that there is no room to waste energy complaining about the play not working out because your energy is vital and it should be spent looking for the next entry point, waiting for the right entry in the way of momentum.

It's all about consistency, I'm not saying you should go out and expect a big move every day, on the contrary... they happen a few times a month and they are absolutely always because of sentimental or fundamentals, the odd flash crash that happens once or twice a year is not something that will make you the "big bucks", it is proper preparation both in the work you need to do and in the mental preparations, that I mentioned above, that is what will make you a trading success. - And what is success in trading? Positive results, and positive results is getting paid.

So, going into the new trading week I hope you start doing more to become a better trader a more consistent trader in every aspect of what a trader needs to do, starting with giving some love, and respect, to volatility.

Den, over and out!

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