Embrace Your Trading Weakness

As traders we tend to live with a lot of regret. 

“I wish I would have held $AAPL longer!”

“I should have bought $FB at $95 when I knew it was going to bounce.”

“If only I had bought $UTX on Monday when it was trading under $90.”

I get it it. I constantly have those regrets too. But often times we leave them as just regrets and don’t actually look at the bigger picture of whether there is a real trading weakness that needs to be acknowledged and addressed. 

And if I am coming off of a good trading week or good trading month, heck, it is even harder to address some weaknesses in how I traded during that time, because, “Hey, what does it matter, I was still profitable”. 

But it does matter, because those same weaknesses may filter through into the next week or the next month and prevent you from being profitable and then you have a real problem on your hands, because had you addressed the issue when it was creating a far less impact on the portfolio, you could have done something about the subsequent week of trading when it actually cost you some of your capital. 

Take for instance this week. I was profitable trading this week, but there is still some areas that I need to use the weekend to look at. Namely, I didn’t like how I handled a few of my trades in the small-to-mid cap area. In particular with a few higher-beta stocks. Some of them I still profited from, but may have gotten out of them prematurely. Overall I made some fantastic decisions this week including nailing that reversal on Wednesday that resulted in a bigger rally on Thursday. But if there is an issue or an area of weakness there with how I traded those small caps, I need to address it now and not let whatever issues that might be there migrate into my trading next week, because if I don’t, it might just cost me some of my hard earned capital. 

So look at all your trades, what you are doing right, what you are doing wrong, and don’t just regret what you did wrong, learn from it, and build upon it so that you become and even better trader down the road.