Saturday, June 24, 2017

Quitting Day Trading...What's next???

This Friday marked the end of 7 weeks since I started back trading. I started with $1,000 on May 10th, 2017 and then added another $500 at the start of June. So in total, I've contributed a net of $1,500 to my SureTrader account in this period.
At the moment, I am down to $700ish in equity or basically making a net loss of $800 over the 7 week period.
Of the $800 I've lost, about $100 was for platform and level II fees (plus a further $100 will be deducted from my account at the end of this month) and all of the remaining $700 was for commissions since I've actually managed a positive gross return over the period albeit a small one..$33.50.
With the economics of this business clearly being tough for small accounts mainly due to the high relative commission fees and platform costs; my trading statistics over the period have actually been quite poor.
My accuracy is about 40% and my win:loss ratio is around 1.5:1. Which is about breakeven before commissions and platform fees etc are factored in.
My honest conclusion after 7 weeks at this (with a day trading style) is that out right day trading is not the right style/strategy for me at this point given my skill level or lack thereof, account size and cost structure.

I need to get back to what has worked for me in the past and what will be more conducive for success for me given my proven skills (track record), current account size and cost structure.
My plan is to switch back to multi-day holds (swing trading style) like I had originally planned to do. I never stuck to my initial plan of hybrid day/swing trading and I've now paid an $800 price for
Essentially I need to take less trades per week, use wider stops and smaller position size and go into positions with the intention of at least holding over night or even up to as many as 3-5 days once the trades are working.
These changes should cut my commission expenses down; increase my win:loss ratio and get my accuracy back up as I am much better at picking winning swing trades off the daily chart versus picking winning day trades off the intra-day (5-minute & 1-minute) charts.
I will stick with this new plan until at least the end of July and then assess my statistics at that point. I believe I will see much better success with this style/strategy but we will see.

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