A community staple is back to update us on how his trading has been unfolding. For those of you who have been around awhile, the name RDTrader12 should sound familiar. He’s been on two previous podcasts and I’ve also interviewed him for the live webinars in ClayTrader University. He’s a great human being and someone that continues to improve with his trading. As you’ll see, his job and schedule took on some changes which altered his trading situation, but he rolled with the punches beautifully and is back in the swing of things. The coolest thing is how he determined he needed to “slow down” in order to “speed up”. I realize that seems like an oxymoron, but I promise it isn’t as you’ll hear. Let’s get to it!
Today we revisit with RD and pick up from where we left off in his last episode. In summary, he was solely day trading options in 2015/2016. He recognized that he wanted to trade futures and began working toward that with paper trading.
The only reason RD wanted to trade futures was because he believed futures were a better day trading vehicle. He didn’t enjoy the factor of theta working against him in his option trades. RD knows that it is just one of the nuances of options and really comes down to personal preference.
RD took 12 weeks to paper trade futures exclusively and he admits that he unfortunately was a victim of fool’s gold. Those 3 months were very volatile and when he went live the market was the complete opposite with very little volatility and movement. He wasn’t able to adapt at first. While he knew his strategy had worked, it wasn’t until he hit the brakes and evaluated his live trading that he recognized that the volatility of the market as a whole had changed.
After taking a hard look at his data, he realized he was overtrading and instead of taking 10+ trades a day, he now tried to find one or two great setups. It was a very big step forward in his trading to trade less and he found he was actually able to split his attention to both options and futures again since he wasn’t forcing trades the entire day.
Since RD’s new job took him away from his desk, he decided to reduce his position size and widen out his time frame for trading. He also started to utilize trailing stops and other methods to manage his positions since he couldn’t actively watch them. He also does his ‘market homework’ such as identifying levels and trends before the market opens so he can set his orders and go about his day.
RD is also looking into utilizing advanced options to supplement his swing trading of futures. His new trading style much closer resembles swing trading instead of day trading which works well with him having a very busy work life.
“A chart is a chart. Once you learn the nuances, it’s trading as usual. I shut down the options platform and paper traded futures.”
“Once you understand it’s not this big mysterious thing, it’s just another chart, I felt pretty comfortable pretty quickly.”
“I stepped back, got my confidence back and adjusted my strategy to not only the market conditions but my risk vs reward.”
“I reduced my risk as I adapted to the environment. I really like to put my stop losses under consolidation points.”