Sept Monthly Review

The highs and lows in a volatile month

Overview

It was a month filled with opportunities and hard lessons.

My most destructive habit patterns emerged right at the start. Filled with overconfidence from a strong August reporting season, I became complacent and strayed outside the very lane that had served me so well. I pushed and forced trades.

More specifically, I took a decent loss in a short Cettire position. This caused unnecessary physical and mental damage. The trade idea was sound but ultimately a non-playbook swing trade that lacked a key ingredient- where is the idea wrong and what is the risk to stop? I mentally planned a stop but did not commit to executing in the moment.

I froze. The loss blew out to $40k.

No doubt I walked into an outlier event with a rogue buyer but this is the risk you run from increasing timeframe which opens up higher variance. I didn’t execute the small things and got punished.

The major lesson is that you must take stops in full. Be planned in every trade no matter how small the position. Invariably, it is the small positions that cause the most leakage as you get complacent.

This whole experience solidified that I MUST get my risk management under control. I can’t grow as a trader and increase sizing until this is solidified.

Dealing with blowout losses is never fun. Most of the pixels in this Substack are dedicated to these frustrating past experiences. Once again, I was forced to pull my head in and grind back.

The rest of this newsletter details this fight back through the month and the lessons learned.

Pull Your Head In

The starting point to get out of drawdown is to stop doing dumb sht.

Analyze the trades, any mistakes, and problem patterns. Perhaps the losses are not due to execution or strategy flaws but just the cost of doing business. The character of the market changes. However, for most discretionary traders, the problems likely run deeper.

I was forced to back off and cut right back. I made a plan and increased my self-awareness each day through writing. From a default position on the sidelines, I chopped my way back through one playbook trade after another. I traded well once more and built confidence. Fortunately, there were quality catalysts that enabled this opportunity. Many of these trades I detailed in the report cards on the member’s chat. Examples included:

• Lithium morning drive on CATL production cuts;

• SGM morning drive on its trading update;

• LNW/ALL breaking news.