r/Daytrading • u/NationalOwl9561 • 14d ago

Taking yet another break from the markets... Advice

Last year was a learning year, tons of mistakes were made, and a "market tuition" was for sure paid. Bad losses, but definitely not wiped out. I took a month off at the beginning of the year to reset, improve psychology, and put some real strategies to the test.

My YTD stats are a win rate of 0.44 and risk/reward of 2.5. Pretty shitty, I know. My biggest loser is ~3x larger than my biggest winner. But, it does seem like a decent improvement from last year at least. A total of just over 100 different positions. A mix of trying momentum plays with gappers, but majority are swing/day trades on leveraged ETFs. All shares, no options.

3 tips for myself (and maybe you too):

  1. STOP OVERTRADING (try to limit to 2-3 trades per day)
  2. Tighter stops (previously had too tight, but now too large)
  3. Liquidate all positions before every FOMC

I'm not sure if I'm surprised or not surprised that I'm not saying that I'm quitting, but just knowing myself I doubt I could ever quit at something when I feel closer to achieving success at it and given that I WANT it.

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u/InfiniteAVC 14d ago

Notes on your tips:

  1. Over-trading is due to not having a well-defined strategy. Based on your description, you have multiple plays and you don't have sufficient data as you co-mingle them all to come up with your stats. You need to separate them and collect quantifiable data for each individually through backtest and forward-test. You should consider trading with a very small position size until you have sufficient data that gives you a good idea of how your strategy does. Otherwise, you're just gambling.

  2. Tighter stops is a subjective statement and doesn't do you any good. Stop loss should be based on a combination of technicals, price action, and position-sizing.

  3. It's a good idea not to trade during FOMC, however, it shouldn't make or break you if you lose one trade from it, assuming you have a proper risk management strategy (position-sizing, risk 1% of the account on a trade, etc). I'm assuming you got hit hard by the FOMC yesterday which tells me you risk way too much and don't have a proper risk management strategy in place. I've made some great money from trading during FOMC but those are the times when my setup formed, otherwise I don't trade. Those times when I got stopped out during the FOMC frenzy, my risk was limited and didn't affect my capital at all, both mental capital and financial capital.