Are You Committing This Common Trading Pitfall?

by | May 8, 2020

When I first started trading, I only had $15K to trade with… and fast forward to today, I’ve generated more than $8,000,000 in career trading profits — and more than $1,000,000 in 2020 alone.

The thing is, it wasn’t just a straight shot to profitability for me. In fact, I made a lot of common mistakes… and that led me to lose approximately half of my $15K account.

It wasn’t until I went back to figure out what I was doing right and wrong — that I discovered what was eating at my account. It’s one common pitfall I believe traders should avoid at all costs… and it’s known as:

 

Style Drifting

 

What’s style drifting?

I believe it’s the number one factor that can ruin accounts. If you diverge from your trading objective or strategies, then you would be considered a “style drifter”.

Think about it like this, mixed martial arts fighters have a specific style… and if they deviate from that, they may get beaten. The same goes for trading, in my opinion. That’s one common pitfall I fell into when I first started trading.

I basically traded whatever moved. However, I knew in order to become a better trader, I needed to set some guidelines for myself and find an edge.

That’s when I developed strategies that focused on catalysts. In other words, I looked for reasons why a stock would move. Thereafter, I created a concise trading plan and executed… and that’s when I started to become profitable.

To this day, I still follow the same approach.

The thing is, I know the struggles of being a trader with a small account… and the one thing I wish I knew when I first started was to take things slow and just focus on one trade idea a week.

Let me show you how it works.

 

Case Study: My One Trade A Week Strategy

 

The strategy I’m using is called Fast 5 Trades.

Let me show you how it works.

It all starts with an idea. Thereafter, I look for key areas where I believe it’s advantageous to buy and take profits… I also know where I want to stop out, in case things go against me. My goal is to generate double-digit percentage returns (or more) in 5 days or less.

Here’s how one of those trade ideas look…

 

 

As you can see above, I had a thesis… and the catalyst here was the company was working on a Covid-19 vaccine at the time. On the chart, it looked strong to me. Basically, the bull flag pattern was forming and I was looking for a move higher.

 

Chart Courtest of StockCharts

 

Shortly after I made my moves in INO, here’s what happened with the stock…

 

Chart Courtest of StockCharts

 

I was able to lock in a quick 6.85% winner and played it safe.

 

 

When traders focus on just one trade idea (or a handful) with an edge, I believe it can help to avoid style drifting. 

If you want to find out how Fast 5 Trades works and take it for a spin, then click here and check out this exclusive offer.

 

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