Wednesday, April 01, 2015

2015 so far - a clarified mindset

Yesterday saw the end of the first quarter for 2015, and while again it has been a relatively light period in terms of the volume of trades taken, the performance has been very good, with significant open profits continuing to be held. These will only be taken into account on the equity and R curves when those trades are finally closed. Even today, which has seen some more volatility in the indices, those trades have continued to move in my favour.

In that respect, the period of poor performance suffered last year was a valuable learning experience, and the tuition fee was relatively small, particularly in terms of what I have learned about myself and my trading approach.

My own mindset compared to say six months ago has completely changed. I am no longer getting bogged down by referring to what the indices are doing (or not doing) - I'm not using them as a tool to determine when I should be entering stocks that may be giving entry signals. I am not trading the indices, so why should they dominate my thinking? I am solely focused on looking for opportunities on individual equities, and am taking those signals which match my criteria, without really paying attention to what the indices are doing.

You will find that, irrespective of what the general market is doing, there will be individual stocks moving in trends, in both directions, at any time.

This way of thinking flies in the face of what a lot of people do - they take a ' top down' approach, by referring to the general market, then maybe look at sectors, before starting to look for individual stocks to trade.

But that's fine - a big part of your success as a trader is developing a method that suits you. And my own approach suits me.

What I am concentrating on is what has made it onto my watchlist - if those set ups are quickly failing, or not even triggering an entry, then that is my early warning system that breakouts are not working in the current market.

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