Well, I had a really deep talk with myself this afternoon. I sat down and had a little “business meeting” with myself. My goal was to write out a full page of thoughts about trading and what was going right and what was going wrong and what I need to do.
Upon having my meeting, I realized that my life just does not allow me to undertake the business plan that I have written. I have so much going on in my life that I cannot realistically trade very short term moves with the attention that is needed. I develop and support software and have numerous other things that occupy time in my life. During trading hours I’m likely to have to cancel trading time due to a user problem or a conference call.
Additionally, I realize that at this time, I need to commit time to learning, organizing and creating and maintaining a vision for myself which still requires a large chunk of my time. My goal is to commit 20 hours per week to trading, but if 8 hours of that time is spent following the markets, that’s not a very efficient use of my time. That time would be far better spent in learning, developing strong organization skills and maintaining a vision. I feel that I’m putting the cart before the horse by spending too much time trading.
But that certainly doesn’t mean that I can’t use the Wavy Tunnel to trade and make money! I just have to change my approach. I think I need to go completely the other way and trade off of the weekly, daily and 4 hour charts. And if I’m going to go up to that time frame, I might as well trade low-priced stocks. That still gives me lots of leverage. It also will allow me to manage more than one position, once I get comfortable. I can reduce my trading hours to an hour a day of analysis of setups which doesn’t even have to be done during trading hours. I think in an hour I can find a stock for which I can make a case, even if it is to put it on a watch list because it is just now completing a BO-1 on the 4-hour. I think I can build a pretty robust set of setups with five hours a week of careful analysis and I can do it at any time of the day. Then I have 3/4 of my time to devote to the things I really need to be doing…Learning, organizing, maintaining a vision.
As a result of my “business meeting” I came away with 40 specific things that I need to focus on. That is a lot. It is not easy running a business! Certainly, many of those are quite long range and some are very short range. Ten of those related directly to trading. Fifteen had to do with organization. I need infrastructure more than anything else since I am just starting out. Twelve items had to do with vision. I’m still quite unsure of who I am as a trader! I am constantly developing at a very rapid rate. Only five items had to do with learning, but they are very broad actions like reviewing all of the videos and learning the Harmonic Patterns cold.
I actually feel very good about this. I feel like I’m rediscovering an old friend by looking at stocks again. With a stock screen I believe that I can pretty easily locate good BO-1 candidates by filtering on moving averages.
I really feel that this is the right move because it lets me focus on the discipline more than the profits. Obviously, 4-hour entries are going to move a lot more slowly but it is going to give me time to focus on the things that really need to be addressed as a new business owner, like developing the proper infrastructure.
There is no substitute for writing a Business Plan, even if it is 95 percent fantasy. It sets a solid mold against which I can evaluate myself and my actions. If it wasn’t for my plan, I don’t know that I would have seen so quickly that I’m barking up the wrong tree. Of course, now I need to completely rewrite my plan. In three weeks I may have a whole new refinement that materially alters my direction. I think that’s just part of finding myself as a professional trader.