Reviewing the April Madness
Analyzing the biggest opportunities and lessons
As traders, we can often live in regret. However, sometimes you just have to step back and have compassion for yourself.
The volatility we saw in April was historic. There were opportunities aplenty. But there is also a great deal of hindsight here, as your brain simply has not been exposed to such events before. Without repetition and familiarity, it's unreasonable to expect consistent performance or profitability. The cognitive demands were significant, and the loss exposure was substantial.
This was a message voiced to me recently by performance coach Andrew Hosken. Reframe limiting language patterns—like “if” and “but”—into expressions of self-compassion, constructive analysis, and goal-oriented behavior.
The experience of April solidified some key skills that I believe separate the good from the great from the exceptional. These are:
Ability to focus for long periods
Being present and clear-headed
Disciplined
Aggressive in unique circumstances
All of these areas were tested more than ever. The good news is they can be trained.
In this review, I want to go deeper on some of these skills, what strategies worked, what didn’t, and plans going forward in a new volatile market regime. Hopefully, there are areas you can integrate into your trading.
Let’s dig in….
April performance:
What worked?
1. Capitulation and Mean Reversion
The orange man’s tirades made cannon fodder of the Australian market.
“Liberation day” was extremely volatile and a mess for the intraday trader. Stocks with potential tariff exposure, such as ANN, BRG, FPH, LOV, and ORI, gapped very sharply with little clean follow-through. There were multiple traps and squeeze events. We were caught in the crossfire of confusion.
The market needed TIME and PRICE to digest the new catalyst. This opportunity presented itself on Monday 7th April, which was an A+ opportunity for a capitulation trade.
Some variables that made this powerful:
TIME. The XJO was extremely weak leading into the event. Strong selling had already built up into the open from the two prior days.
PRICE. SPI Futures were indicated -4.5% from the previous cash close. Huge gaps lower across the board. It is this gap and selling that create forced liquidation and a potential climax event.
EXTENSION. Multiple stocks closed the previous day outside the Daily Bollinger bands and > 15% from your favourite trend following tools. Everything was stretched.
CLIMAX. On Friday, the overall volumes in the US ended at 26.8b shares, which was the highest volume on record; 35-to-1 decline/advance on SPX; there wasn’t a single name in green; VIX hit 45 twice on Friday. Daily Volume bars were 2x the previous.
These are variables that can be reverse-engineered and built into a system going forward.
Many of these same principles were apparent on the Gap-up event on Thursday 10th April, on the infamous “90-day tariff pause”. Price swung from one end of the range to the other with a HUGE gap.
What I learned from these reversion experiences:
Be prepared to make the uncomfortable and non-obvious trade. If it feels like the world is ending, it usually doesn't. What is the highest EV in such scenarios? It is not chasing extremes.
The best trades go from the start. The leaders took off right from the open, ignoring the direction of the futures market. It felt hard to chase, but the market is blessing these candidates. Follow these and the right sectors. It was the same on the gap-up day, where some stocks got slotted from the get-go.
Wait for the right side of the V and clear confirmation. This lowers the risk to make more.
Automation increases bandwidth and the ability to go wide.
2. Other strategies
Despite the macro taking the front seat, there were still multiple meaningful single-stock catalysts.
Morning drives on stock-specific news events e.g. CTT on a horrific trading update; DRO on major contract wins; and PDN on its surprise quarterly beat.
Trend trading powerful sectors such as Gold and Rare Earths. Drop down a timeframe and pick key inflection points intraday to trade the broader Daily theme.
You can’t be across it all, and it is important to stay in your lane. However, I always try to circle back on major catalysts, what I learnt, and potential strategies to capitalise. Close that loop.
What did NOT go well?
Now for some losses and all that good stuff that happens to real traders.
1. Overnights
Each late-night Trump tweet flipped the markets like a coin in the air.
Increased volatility leads to increased variance and an increased chance of getting ruthlessly punished. There is so much you cannot control under such circumstances.
I have no fundamental edge here.
I have no idea where the market is going.
But with so much intraday opportunity, who cares? Invariably, it is those overnight losses that will affect your performance during the day, both in terms of distraction AND your ability to size up an intraday A+ trade.
It took me a while to heed this message.
The solution is to build a more robust end-of-day risk management routine with checks, hedges, and volatility inputs. Furthermore, never carry a losing position home.
Discretionary Overnights:
2. Not cutting in full when wrong
Fast markets require fast feet.
This was a sentiment-driven environment. The moves often looked overdone, but resisting them often ended badly. Instead, taking losses and increasing discipline enabled you to stay in a position of strength for the next opportunity.
A few missed stops added up quickly.
Remember, it is a stop because in aggregate, the position will move against you. Thus, it makes no sense not to get out of everything. Autoload stops in full and accept uncertainty.
A Paul Tudor Jones quote comes to mind:
Now I spend my day trying to make myself as happy and relaxed as I can be. If I have positions going against me, just get out. If they are going for me, I keep them...I am always thinking about losing money as opposed to making money
Missed stops:
3. Lack of A+ sizing on best plays
The best traders bet really big in asymmetric hands.
Multiple reps, experience, and the ability to quickly process risk/reward are key to identifying such opportunities. It requires a deep understanding of your playbook and knowing what is scalable. From here, it is about rising to the challenge to execute. Press the advantage when it is working.
There were a few standout opportunities where I failed to think exponentially. Reviewing the tape, observing available liquidity with data, and reconfiguring sizing protocols all help to train this skill.
Lessons and Improvements
What if the biggest improvement is NOT adding another layer into the routine or something to complete? This adds complexity and more unfinished tasks. Instead, what if the real development is to take a step back and identify the cue or trigger that leads to a certain behaviour?
These triggers can be:
→External, such as a chatroom callout.
→Internal, such as a common emotion or thought.
It is the cue that leads to behaviour in anticipation of a reward.
So, rather than bolt on yet another process into the routine, the secret sauce is to hone in on the underlying trigger that is driving the problem pattern in the first place.
Overtrading? Why?
Losing discipline and focus? Why?
Not sizing up? Why?
These are the areas I will be exploring next month.