Find What Makes Sense
With FinTwit (financial twitter) being a source of education, aspiring traders can get exposure to many different types of trading and trading strategies. This is great news and terrible news at the same time. A trader that has discovered his/her edge can curate so they are adding to their trading knowledge over time. Aspiring traders aren’t set on how and what they are going to trade. Many times they will follow many different traders trading many different strategies/products and many different time frames. This can create a huge problem of information overload and strategy drift.
This week I read a tweet from an aspiring trader that has been open about his journey thus far. This trader JT York https://twitter.com/JohnTraderYork was voicing his thoughts on intraday trading. He seemed pretty fed up. Almost to the point of no return when it comes to intraday trading.

Disclaimer: I know John and have had many conversations with him. I know he has been exposed to a decent amount of trading strategies over the last few years. I also know that this was his second time pulling back from trading..that’s important. He isn’t a quitter. I for one hope he gives it one more try. I am going to write here a bit of simple advice to him if he does decide to give it another go. This advice isn’t just for him but for any struggling trader.
John needs to find something that makes sense to him. It can’t be something that he has to convince himself can work. That's the simple advice, find what makes sense to him! It doesn't need to be a whole strategy or something that has 30 setups a week.
Step by step work down this list:
Define what type of price action makes the most sense to you. Is it trend following, mean reversion or breakouts.
Define what pattern within that price action makes sense to you. Notice I said pattern, NOT patterns. Just one.
Pick one product. This part doesn't have to mean just one stock if you trade equities. It might be a specific type of equity ie: low floaters, single digit midgets, earnings play etc.. The goal is to know what you are trading intimately.
Define some context for when this one pattern sets up. Things like relative volume, time of day, and regime. The goal is to identify when it has the best chances to play out within your expectations.
Define the risk management for this pattern. Make sure this part fits what you can handle. A wide stop may sound good but will you be able to handle the bigger losses? A tight stop always sounds good but will you be able to handle the lower win rate?
Ignore everything else!
Strip it down. Take from all you have been exposed to and grab what makes sense to you only. Start trading it small and expect mistakes. Then fix the mistakes. Rinse and repeat. Don’t stray. Stay laser-focused on what you have built. Once the mistakes have cleaned up then start to raise size.
