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Wednesday, May 23, 2018

Current thoughts and update on Sugar trade.

Not much time to report this morning, but I felt compelled to write a little.
My Sugar trade looks like it's taking off a little bit, so that's nice. You should be able to click on the images to view them full size.

I'm long the March 2019 contract from $.1273 (that's 12.73 cents/lb) and up a little over $800 at the moment. Because the contract is for 112,000 lbs, every one cent it goes up equals $1,120 profit. It could still be in an overall downtrend, and if that's the case I'll just add more when it comes down a bit, but it would be nice to ride it up a few cents, as it looks like there is going to be resistance in the low to mid 14's.

On the stock trading front, I am still pretty consistently profitable. Here is my current cumulated % gain and my % win/loss distributions. Up 486% at the moment. Keep in mind this is not representative of the % my account would be up, because I would not be utilizing 100% of my account on each trade, and therefor not be realizing these percent gains exactly. If I were to use 20% of my account on each trade that would put the account up roughly 97%, which in 5 months is pretty damn crazy. That would be risking 20% of only the initial account size as well, it does not include any compounding.

As I have been going through this experience, things have been (naturally) becoming clearer to me. The funny thing is that in the beginning I felt like I would never get it, that it would never be clear to me. I have had so many days of feeling like a total loser, confused about the whole thing even though theoretically I understood some things. I have been speaking into my phone here and there describing what is become clear to me. So far I have a few hours of talking that I feel I will eventually put in writing for others to benefit from. To sum it all up though only takes a few sentences, maybe less. 

Go where the money is. which means follow the stocks that are actually moving big, on big volume. They are usually moving for reason, which helps very much to understand so that you can gain an insight as to the future potential of the stock. Learn the patterns, understand why the patterns play out like they do. There are psychological reasons these patterns happen, and you need to operate on a level of awareness that makes them clear to you.  The price is always the truth. That means if a stock is not doing exactly what you want it to do, don't be fooled into stubbornly holding because you are convinced it will eventually do what you want it to. Even if it does, if it isn't right now, you're wrong. And lastly, Cut losses quickly. Cutting losses in my opinion is imperative to success. Unless you are trying to short a hard to borrow stock you can always get back in. Averaging in consciously and carefully can be done, but you must still respect your overall risk and be willing to cut it like any other trade. Another way to say cut losses quickly, is to say It's okay to be wrong, just don't stay wrong. 

It's amazing that it breaks down to those 5 sentences, and that I can literally talk for hours about it beyond them. The reason for this is that there is nuance to each trade because the context will always vary, but the overall strategy behind playing the pattern will remain the same. 

Another facet to update on my life is my schedule. Trading and Truck driving don't mingle perfectly, but I am grateful to work for a company that offers enough flexibility that I can have plenty of time in the mornings to trade, and even during work on a delivery I often have time to build a watchlist, study, or archive my trades for the day. The job I currently have provides so much opportunity. Even though that is great, I feel this point in the future coming closer each day. The one in which I will actually start trading live and taking real steps towards the independence from obligations to an employer. 

The funny thing is, in the last few months I have watched myself go from wanting to quit, to finding some success and starting to feel confident that I can do it, and will do it, to in the last few days feeling like this percentage chart I have is too good to be true.

The reality is, it probably is. I do have some long term stocks that I am holding right now that would hurt it a bit if I just took the losses, but I would still be up several hundred percent. I feel that the biggest hurdles before me at the  moment are actually sizing my trades up each and every time so that my account utilization is normalized to maximize my progress. As far as long term trades, I am pretty sure that is something that will need to wait until my account is pretty big. When I go for real I will need to focus on the most volatile plays to maximize the use of my capital. It would not be wise to employ any of it differently.

I recently watched a motivational video with a guy named Darren Hardy, in which he said that when he decided to really be successful and committed, that he made a list of things he was going to give up. He said he gave up body building because it was over 2 hours a day that he wasn't moving forward on what really mattered. I guess I have been leading up to the same decisions for myself. It was a goal of mine to get into the best shape of my life this year, which is completely subjective, but I now know I am committed to being a successful, consistently profitable stock trader at all costs. I want to get into the best financial shape of my life this year. The great news, is that I already am in the best financial shape of my life, but I want to blow it out of the water. I want to get in the best situation for my entire family.

A great point was made in another motivational speech I listened to, which is "If you make your pain about you, you're going to want to quit when it gets painful, but if you make your pain about something outside yourself you can keep going". The moment I start feeling down about trading, not only do I tell myself that if anyone out there is doing it I can also do it, but I tell myself that I am going to give my wife and all those in my family the life they deserve. I'm going to set them free from debt and such crazy obligations of their precious time to making their employers rich. Not that there's anything wrong with work, there isn't. In fact we are made to move and work, but I want to enable them all to put their hearts into something that matters to them, something that will bring fulfillment instead of dread and depression.

That is my reason, and I will not stop trying. I will do this. I have been working up to this for 19 years now, and I am taking it more seriously than ever. I am seeing results, because I am doing the work.

Until next time.