October Review-November Goals

In October, there was good progress, but not where I initially expected. At the beginning of the month, I set a goal to read 5 hours a day about the companies I trade. What I saw, though, is that this goal requires a very high-energy effort but has a low return (at least short term). I was often in a situation where I was reading a lot and then going to the market and seeing how that company doesn’t do much. In addition, the environment was bearish in September and October, and the companies I was reading about were going lower under market pressure. Reading for 5 hours in the first part of the day (I live in Europe) meant I was quite exhausted in the afternoon when the US markets opened, and I was not feeling that sharp and productive. I think by the end of the month, I ended up reading around 1 hour- to 1 hour and a half per day, and most likely, I will do that in the future and consider it a decent balance to stay up to date on tickers with a setup or with news.

A big challenge as of now is the market itself. Last 3 months SPY is going down, a major selloff in the bonds market etc., and the two setups I focused on so much in the last year just don’t work. There are few breakout setups and EPs don’t happen almost at all. This creates a very challenging situation where, as a trader, I look through hundreds of tickers without finding much, and then the market opens, and I sit for hours in front of the screens, and the stocks on the watchlist don’t do much. For traders who made money in the past, this situation is easy to manage; they can step away from trading for a couple of months without worry but for me, as a beginner, it is much more difficult. First, I have to continue learning, and fewer setups means fewer opportunities to learn. Second, I still don’t know if I will be able to make a living out of trading, and because time goes fast and there are not many results it starts to add pressure on my self-leadership with the main questions being “How long will I be able to go through this?”.

What I think I did right in October was to stay in the market. I removed almost all the filters in my scanners, watching stocks from 10 cents upwards, trying to see what the market does. I also made sure to watch and evaluate the market starting from 7 AM US time (2.5 hours before open). I was looking for breakouts and EPs but also I allocated time in which I tried to assume I didn’t know anything and let the market tell me where the money flows. Of course, I still do 5-10 traders/day, and I didn’t do well. But because I still keep positions small, the losses are manageable (-$190 for the month).

Watching the market day by day, I saw that even in a bearish environment, there is vibrant activity in some stocks and intensive daily trading. There are tickers that jump significantly intraday, following some news catalysts or some form of organized speculation, and there are also tickers that show a very high traded volume. I assume now that swing traders do not do well in periods of a market correction (this was proven by deep dive data before) while the day traders remain active and can make a profit. It's most likely that as a trader, you have to be able to transition from day trading to swing trading based on the short-term phase of the economic cycle. The current stage is even more favorable for day traders because there is a lot of liquidity left in the market from the incentives and stimulus done during the pandemic (the Chip Act, Inflation Act).

As I know a bit better the Breakouts setup Qullamaggie Style, one of the things I tried to look at first is if the tickers that show a big intraday volume form an Intraday Breakout Setup Qullamaggie Style. And surprisingly, there are many of them. The setup has the exact same key structural elements as the daily setup and behaves in a very, very, very similar way. The risk/reward ratio is not bad. In October,I saw setups with RR ratios of 1/3 to even 1/10 and all this happened without having to wait for 2 weeks to take a profit and without being dependent on the influence of the macro environment elements that block swing trading so much these days. As of now, I think these observations on the intraday charts can be a good opportunity for me to learn and make money in this bearish environment, and I just have to adapt my scanners and fine-tune my knowledge. Overall, I will do the same thing as on the daily chart, but trade intraday. This change of style shouldn’t be that difficult. That is why here are the November goals...

November Goals

• Make an intraday Deep Dive on the Breakout Setup Qullamaggie Style. August and October intraday data was selected for analysis. Let's see if the assumption that trading the setup intraday, even in bearish market environments, can provide many and good quality opportunities for profit.
• Make the September and October Breakouts and EP daily Deep dives. The data will also be helpful to compare the productivity and occurrence of the Breakout setup on the daily and intraday charts.

Self-Leadership and Mental State

There are some challenges because time goes fast and there are no setups. This adds pressure and a bit of a struggle. The fact that I relocated from The Netherlands to my home country helped me a bit to deplete my budget slower but the pressure adds up and I step by step go out of money but also my belief that I can make it is decreasing. A project like this is not just quotes about Livermore on Twitter and will test your self-leadership, innovation and ability to adapt quite often… By now, it is already more than a year for me as a full-time trader, and as you can see, I cannot say I am consistently profitable...

To end this monthly review on a positive note: We do this not because it’s easy…. but because we thought it would be easy! :)

3 deep dives ahead for me to do in November yeeey!

Wish you a good month ahead,

|@flow