2017 Year In Review

What a year. So much happened this year, I don't even know where to begin. I'll start with a quote.

"Life is 10% about what happens to you, and 90% how you react to it."

That is one of my favorite quotes of all time. I've got a massive binder/scrapbook filled with quotes that I've been collecting for over 10 years now. I'll share some of the pages on my Twitter in the future, lots of really good nuggets in there. But that quote in particular means a lot to me. It's extremely relevant to a traders journey, and it's a large reason why I'm still here today - doing what I love & building my own dream, rather than working for someone else and building theirs. 

To reflect on that quote - you should live your life & trading with this in mind, in my opinion: "Nothing is ever as bad as it seems." We'll take a bad loss for example. Right then and there after you take the loss, that's as bad as it's ever going to feel. The pain will never be worse than that moment. It only gets better. As time passes, you realize the world is not ending, and it's time to make a decision. The 10% is over. Now it's time for the 90%. What happened to you, happened. It's done. All that matters from that point on - is how you react to it. So act wisely, act definitively, and act now.  That was the mindset I took with me throughout this entire year, and I think it helped tremendously. 

But overall, the game of day trading (in the form we do it, trading momentum names) is not for the faint of heart, it's not for the overly analytical thinker, and it's not for the cautious risk-averse "investor". It requires a very different skill set, a short memory, and a tenacious, relentless unwavering confidence in oneself. Anytime I take a loss, it does not bother me anymore. And I mean that. It really does not bother me anymore. I used to get annoyed and think about losses, now it's quite literally "Ok. No problem. Will get this back shortly, tomorrow is a new day" and that's the end of it. One more quote, and then I'll get into it. 

"Success is largely measured by your ability to remain enthusiastic in times of hardship." 

So that's what I try to do. Anytime I have a hard day, I think about that "90%" how you react formula, and know this situation will be as good as I make it, or as bad as I make it. I am in control, not the situation. Me. So I choose to remain enthusiastic, trust myself that I will make it back, and the next day I am back at my desk like it never happened. That's the attitude that will take you very far in my opinion, and the only way to excel in this crazy world we operate in. 

Alright. Let's talk about why 2017 was different than any other year for me. Hopefully you have all read my Sniper blog post - if not do that now before you continue. 

What I've found that works best, for me, is the sniper mentality. I have been trading less and less. And the less I trade, the more money I have been making. For example during all this blockchain madness we are currently in, there are legitimately 10 different momentum names for you to choose from every morning that are all going nuts. Opportunity is through the roof. However, I'm not going anywhere near most of it. I've been very meticulous and picky about which ones I go after, and why. This is not as exciting as scalping all kinds of trades all day and chasing momentum like a rabid dog, sure, but guess what. Get some size onto "the one" and be right - it gets exciting very quickly. 

Two recent examples. First is WATT. This was all I was looking at the last 2-3 days. It's trading at $30 and belongs at $10. The potential of that trade is SO big, it blows everything else out of the water. So, why would I look at anything else? I mean sure, I'm sometimes trading other names as well but with much, much smaller size and they have much less of my attention. Why should my attention be elsewhere on another pig running $1, when I'm looking at a $15-20 potential trade right here. These don't come along every day. When they do, don't miss. So I block everything else out, stare at the tape of my intended target, learn how it trades intimately inside and out, and put everything I have into that trade. These are the trades you hit with 10x the size of a normal trade, and when all is said and done, even though it was just one trade, the monetary equivalent is like you traded 10 names. 

I cannot stress this enough, that all trades are not created equal. Most times I'm not doing anything exciting, just waiting in the weeds. Messing around here or there with 2K-3K scalps. But when something great comes along, that's when you buckle in, and you can't be gun shy. If something is screaming to you that "this is a golden opportunity" well.....HIT IT!! 

The other was NXTD. This thing went from 1.50 to 8 in a week on 100M+ shares changing hands. Are you kidding me. If you actually think about that, and how much money and volume that is, you'd be hard pressed to care about any other trades for a little while either. The thing about runners that extend on massive volume, is that all actions have an equal and opposite reaction. For those 100M buyers who sent it up, guess what? There's going to be 100M of sellers to work out on the way back down. So that volume to me says "don't forget about this one, continue to follow it down, it will go further than you think" and that's exactly what we've been dealing with the last few days, and I've been all over it with size. So that mentality of searching for the outliers and going after them with full focus and not covering until the job is done - that's what has been working for me and the big change in 2017.

I don't want to make this too long, but there is one more thing I want to discuss. A defining moment for me this year were two trades on XNET and RIOT when they first started running back in November. These trades made me grow up real quick. I got into a whole new area I had never visited before, size and dollar wise, which was quite the culture shock, but an amazing growth experience as well. I'm not going to get into the XNET story that was a disaster that ended well and not proud of it, but I will touch on RIOT quickly. Nov 29th I believe it was, the day RIOT gapped up to 17-18 and closed 13s. I was swing ss from the night before with about a 15 avg, with absolutely stupid "wtf are you thinking" size for how thin RIOT traded. Shortly before open it was ripping thru 17 and I was down 6 figures unrealized on a single trade for the first time in my life. That was an experience. I was on the phone with Eric all morning and he was keeping me calm, but man. That was very, very stupid and I count my blessings to this day I got let out of that one - was a good lesson without the repercussions, to relax and not get too crazy until you are RIGHT on the trade. I covered 13s for a nice win - but I look back on it now, and seeing that RIOT went to almost FIFTY, five zero, $50. That's $30 higher than when I was involved, that will make you do some thinking. What if I was involved then, intstead of the smaller run? Who knows. Scary thought, but getting let out the first time is exactly what kept me out of the "real" run up towards 50, I took the stupidity from the first time and applied it moving forward. That's all you can do. You're going to mess up, it's inevitable, just make sure it's not for nothing, and you learn from it. We're all human and that was a potentially disastrous mistake on my part, even though it ended well, and I know that. There was no back-patting or celebration that day, just relief. There's one very specific lesson I want to make light of regarding that thought, which is this. 

Being early in a trade is just as wrong as being completely WRONG. It's the same thing. Trading is all about timing, timing, and timing. If your timing is off, no matter how correct you are, you will likely be dead before you see the trade work out in your favor. And playing the game of trying to wait it out is flying too close to the sun for anyone without a massive bankroll and extensive experience. There are people who do it, but I would not recommend it to the average trader, you are asking for it. 

RIOT is worthless, sure. Everyone knows that. But if you thought that at $20, obviously you thought that even more at $30. But how about at $50? How's "I'm right, this is garbage" treating you up there? It's not, right? You're already long dead. Even though you are "right" about the company, you were still dead WRONG. So the whole point is, especially in this new emerging cryptocurrency market that's sprung itself upon us like a bat out of Hell - you have to be smart. Research and knowing something is trash is not enough. You have to exercise the utmost amount of patience, discipline, and focus on timing. My man Conor McGregor said it best: 

Precision beats power, and timing beats speed. You can be the first one into a short and think you have the top. Sure, you were speedy alright and there first, but you'll never beat the trader who exercises patience with a focus on timing and precision. You have to be doing the right things at the right TIME, or else its all for nothing. If you were following my tweets last week, I sent out a few warning shots about WATT, and how I was trading it. I was boxed every night, and I didn't unbox until $28. I didn't care about being short from $33. Who cares. When the party is over on these insane runners, it's really over. There is no need to be a hero and catch the top, so even being $5 late, I still made $6-7/share on covers and kept some as well. Not too bad for exercising caution and waiting till I was absolutely sure it was time, right? Having those kind of thoughts is what changed most for me in 2017 - thinking out a viable strategy well ahead of time, rather than charging in emotionally on something too soon. I had my moments where I abandoned this logic, but for the most part, I executed this ideology very well throughout the year, and that's what matters. As long as you are improving every year, even just a little bit, you are well ahead of most. Many small steps lead to a great destination. 

So, that's really it. The 2017 takeaway focuses for me this year:

1) Less is more - find the best opportunity out of the bunch, hyper-focus on it, and pounce.  

2) All trades are not created equal - some call for stepping on the gas, others backing off, and still others completely avoiding. Learn the difference & your comfort level doing each.  

3) Timing is the most important part of a trade. Not the thesis. 

4) Patience. Precision beats power, and timing beats speed. 

Happy New Year guys. Be safe, get focused, and lets make 2018 the best one yet.

- D