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Want To Be A Better Trader?

As we approach the end of the year, all eyes are on the Dow reaching 20,000. Will we get there? When will it be? These are not the questions you should be asking yourself. Yes, we will get there and I think it will be by the end of the year, but that is not what I am focusing on. I am focusing on the transition from 2016 into 2017.

Why is this important? I have been managing money professionally for almost 28 years now and I always try to focus on consistency. Having a home run trade is great, but we all know the reality is that those are few and far between. In order to grow your money over time, you must be consistent. In order to be consistent, you must evaluate your results over time. You should always know how your P/L stands on a monthly, quarterly, semi-annual and annual basis. In reality, institutional money managers will focus on much longer time frames such as 1 year, 3 year, 5 year, 10 year and even further out. They are also typically looking at “rolling” time frames. Why? They understand that having a “hot hand” is not how you stay in the game long term. You must be consistent over time and this means you will have good trades and bad trades and you will have good times and bad times.

The bottom line is that if you don’t know exactly where you stand on your P/L, you need to figure it out before the end of the year and then look to hit the reset button on January 1st for a new time frame. By keeping track of this, it will force you to truly evaluate your trading and see where you need to improve and areas you may need to work on. This one step alone will make you a better trader.

Bruce Marshall

Bruce Marshall Income Trading Specialist

Bruce began his career working for a Wall Street firm on a bond desk after the Crash of ’87. He spent several years trading bonds until he switched to the equity side which developed his love of trading equities and options early on. He traded IPO’s, secondaries, and preferred’s. In the early days, he actually had to hand write “tickets” to buy and sell securities.