No one wants to be anything less than their best.
But are you willing to put in the work to make that happen?
Do you have the right direction in order to make that happen?
The answer to my first question is on you, but I can help with the second.
I developed a short list of Core Principles that I’ve used in the past, developed and honed down to the 7 I follow daily, and plan to follow in 2021.
Hang it on your wall.
Tattoo it on your forearm.
Do whatever you have to do. But make no mistake, skipping this list could cost you next year.
My 7 Core Principles For 2021
1. Stick to your trade plan.
As soon as you veer off your plan you involve emotion. And frankly, there’s nothing worse a trader could do.
Once your emotions enter + discipline goes out the window, the likelihood of you making smart decisions goes down logarithmically.
2. Know your target entry and exit prices before you enter a trade.
Anyone out there ever chase a trade?
I know I’m guilty. And shockingly, it rarely works out in my favor.
Know how much you are willing to pay to enter the trade and how much you are willing to lose if the trade goes against you.
3. Check for stock news before you enter a position.
Is there an upcoming earnings report?
Did bad news just come out about a clinical trial?
This step may seem insignificant, but it could be the difference between a winning trade and a losing one.
This mistake is COMPLETELY avoidable… it’s just a quick internet search.
Do yourself a favor + don’t skip Principle 3.
4. Always be learning.
The second you think you know everything is the second you’ll plateau.
Learn from your mistakes.
Learn from traders who are smarter than you.
Learn from the mistakes THEY make. Never stop learning.
5. Cut Your Losses.
Never let a loser run so far you cannot come back and trade the next day.
You can always re-enter a position with a new + improved trade plan.
The most important thing is to keep yourself in the game. The second you let a trade slide too far into the negative is the second you bench yourself.
And if a trade really runs away from you, you could bench yourself for good.
To make money trading, you have to stay in the game.
That starts with cutting your losers early. For me, I respect a 50% stop loss on all trades.
That might be too much for you.
Maybe your risk tolerance is higher.
It’s up to you to decide what you’re comfortable with — and more importantly — to respect that stop loss.
6. Understand that you are not bigger than the market.
This is critical. The sooner you embrace this, the better off you’ll be.
You have to realize that the market will always outlast your trading account, no matter how big it grows.
Not to mention the market often moves in unpredictable + irrational ways. Do not try to bend the market to your will.
We take what the market shows us, and find ways to position ourselves to make money around it.
7. Stick to your trade plan.
This one’s so good, I put it twice.
If you adhere to one core principle on this list, let it be this one.
You’ll thank me later.
Cheers to the New Year and making actionable resolutions we have a chance to keep.
Thanks for reading…See You Next Tuesday
DISCLAIMER: FOR EDUCATIONAL AND INFORMATION PURPOSES ONLY; NOT INVESTMENT ADVICE. The materials presented from Option Pit LLC are for your informational and educational purposes only. Neither Option Pit LLC nor its employees offer investment, legal or tax advice of any kind, and the analysis displayed with various tools does not constitute investment, legal or tax advice and should not be interpreted as such. Using the data and analysis contained in the materials for reasons other than the informational and educational purposes intended is at the user’s own risk.
DISCLAIMER: OPTION PIT LLC IS NOT AN INVESTMENT ADVISOR OR REGISTERED BROKER. Option Pit LLC is not responsible for any losses that may occur from transactions effected based upon information or analysis contained in the presented materials. Specific trading ideas or strategies discussed in the presentations or materials are entirely illustrative and do not constitute the solicitation of a transaction (or transactions) or a recommendation to execute a particular transaction or implement a particular trading strategy.
DISCLAIMER: TRADE AT YOUR OWN RISK; TRADING INVOLVES RISK OF LOSS; SEEK PROFESSIONAL ADVICE. To the extent that you make use of the concepts with the presentation material, you are solely responsible for the applicable trading or investment decision. Trading activity, including options transactions, can involve the risk of loss, so use caution when entering any option transaction. You trade at your own risk, and it is recommended you consult with a financial advisor for investment, legal or tax advice relating to options transactions.