October Monthly Review

Assessing the best opportunities and areas to improve

I failed to achieve my September goal. Instead of capping my losses in overtrades and mistakes to less than $15k, I blew out to more than $50k.

Initiating change and a new goal is one thing. Sustaining this momentum is very much another.

This was an extremely erratic month with a lack of consistency. My underperformance was largely attributable to unsystematic Daily swing trades, where I strayed out of my lane and managed risk poorly. Furthermore, I overtraded by chasing volatility which does not equal opportunity.

There were a lot of great opportunities and easy money drives. This is often the case during October as this month can be viewed as a "confession" season. I theorize this seasonal time period has more edge than Earnings given the market is caught off guard and unprepared. I captured some of these moves such as AMP, BOQ, ZIP, and CTT but I left a lot out there for my strategies.

The glaring miss was my failure to gauge the magnitude of the MIN and WTC corporate governance catalysts. It is extremely rare to have an episode like this, let alone one after the other. There was one choice short setup in WTC on 17th October which had huge expected value given that Daily setup and the trapped nature of the market but I didn't plan the catalyst at all pre-open. I got what I deserved.

Improvements ultimately come down to a few major levers:

1. Trade selection via planning

2. Mental pre-open routine

3. Systematic playbooks vs overnight discretion.

I was fully aware of my early poor performance and put in the work. As a consequence, I executed with more consistency due to a solid focus on preparation and easy money. Why do I always make it so hard on myself before the message sinks in?

The major feedback that resonated to sustain such change was from the writings of Brett Steenbarger¹. In particular, a framework for breaking old habits is the psychodynamic model. From this deeper introspection and action steps, I am building multiple corrective emotional experiences so that new constructive patterns can be internalised.

This remains the low-hanging fruit to double down on during November.

Key Takeaways

1. Overnight variance is huge: by widening the timeframe you open yourself up to randomness and events you cannot control. After seeing the success of Daily swing setups on the China stimulus, I attempted to replicate this style. The reality is this is untested, discretionary, and rare. The way to build a playbook is in a safe environment with smaller size and specifics. A key factor I learned is to de-risk the trade post news. A major trend doesn't just start on a chart breakout but needs a meaningful catalyst for the market to vote via price action. Running PDN into the Quarterly was my expensive lesson.

2. Be a slave to the trend: systemize my playbooks so that I am always with the trend. My biggest losses came about when I forced a bias instead of following the price action and trend on the intraday chart e.g. PLS day 1. What made matters worse is that I turned this into a longer-term swing trade which compounded losses. Accept the market is telling me "not now". Take the easy money drives and avoid no man's land.

3. Assess the EV of the trade: this is a question I should always be asking myself before every trade. If I can't calculate it, most likely it is because the trade is low quality or non-playbook. I can only really increase sizing when I am thinking deeper about uniqueness and edge. This was a powerful insight from the  Lance interview at Trillium that I need to sit on.

4. Mental preparation pre-open is key to performance: I am at my best when I am planned and visualising the patterns I want to see. I am at my worst when I am trading impulsively and reacting. Building a new mental routine has greatly helped facilitate this best practice.

5. Repetition combats relapse: building multiple corrective emotional experiences helps internalise new constructive patterns. Making initial changes and breaking old habits is one thing but a "working through" process is needed to extend these gains.

Top Opportunities