What We Learned from 2017 & Bad Habits to Eliminate before 2018 December 9, 2017 Active Trend Trading Dennis W. Wilborn
Disclaimer U.S. Government Required Disclaimer Commodity Futures Trading Commission Futures and Options trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets. Don t trade with money you can t afford to lose. This is neither a solicitation nor an offer to Buy/Sell futures or options. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed in this training. The past performance of any trading system or methodology is not necessarily indicative of future results. CFTC RULE 4.41 HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN. All Materials presented are for training purposes only. Traders should paper trade any new method prior to risk of personal capital. Copyright ATTS 2007-2017
If you don t know precisely what signal is yours & how you will size and manage your position STOP TRADING! ~Peter Brandt Copyright ATTS 2007-2017
2017 Assessments & Adjustments 2017 A Year of Explosive Growth Started 2017 with the following objectives 1. Analyze past performance & Future Potential The Good, The Bad & The Ugly 2. Chart a Course for 2017 based on your analysis 3. Focus on Fewer ETFs & Stocks 4. Solidify your System Take the Trade Triggers 5. Write out your game plan and commit to it So, How did I do and what needs to modified going into 2018? Copyright ATTS 2007-2017
2018 Assessments & Adjustments 2018 A Year of Discipline & Consistency? Start 2018 with the following objectives 1. Analyze past performance & Future Potential The Good, The Bad & The Ugly 2. Chart a Course for 2018 based on your analysis 3. Stay with Trading Magnificent 7 ETFs & Growth Stocks 4. Focus on completing daily & weekly review to place orders 5. System works Great! Take The Trade Triggers 6. Share BONUS Trades with BAMM & Others 7. Write out your game plan and commit to it Copyright ATTS 2007-2017
2017 Assessments & Adjustments for 2018 Performance YTD as December 8th Copyright ATTS 2007-2017
2017 Assessments & Adjustments for 2018 Closed Profits YTD as Dec 8 th Target = 60% W/L Ratio Yearly at 65% Target Return for Year 40% Trading $116K Marginable Account Copyright ATTS 2007-2017
2017 Assessments & Adjustments for 2018 1: Analyze Past Performance & Potential since the last reveiw a. Go back over every trade b. Define if it was a good or bad trade c. How Did Triggers Work? d. Identify Repeated Errors e. Identify Corrective Action f. Identify Potential based on past price action Assessment: Triggers worked very well! Improve on daily & weekly reviews and taking triggers. Strong potential for each entity! Copyright ATTS 2007-2017
Where have We Been & Setting the Course for 2018 1. Determine where I ve been Success: Leveraged ETFs/IBD 50 & Strategy III Traded Well Failure: Needed to enhance Strategy I 2. Determine where I am I have an absolute solid trading system for short and long term positions Greater Clarity has been shared 3. Determine where I want go in 2018 Hit overall performance measurements, but want a better distribution between Strategies 4. Determine the waypoints along the way to measure progress Measure Monthly & Quarterly 5. What do I need to do more of Trade Strong Growth Stocks and Select Leveraged ETFs, focus on Early Warning Alerts; get daily & weekly review and orders set up; cash flow & portfolio building 6. What do I need to do less of or stop all together Partial Positions; stop letting distraction impact my priorities; missing second chance entries! 7. What are the unknown dangers Becoming complacent and undisciplined in required reviews Copyright ATTS 2007-2017
Where have We Been & Setting the Course for 2018 2018 What kind of a year? Discipline and Consistency What Actions must I take now for 2018? 5. Write out your game plan and commit to it Copyright ATTS 2007-2017
Beginning Now, Dec 9, 2017 and carrying on through end of 2017 and into 2018 I Will Where have We Been & Setting the Course for 2018 1. Only trade IBD quality Growth Stocks or Quality ETFs on my watch list or Options on the same 2. Conduct my weekend and weekday analysis consistently 3. Journal every trade 4. Follow my Trading System Rules 5. Trade to Promote Compounding 6. Be Patient and Wait for Sound Strategic Entry Triggers I commit to this plan for the remainder of 2018! Signed: Dennis W. Wilborn Copyright ATTS 2007-2017
For Greater Success Never Stop Refining 1. Trade a Proven Winning system a. Makes measurement easier if the proven system is not performing it is typically because of operator error b. Know the expectations of the system and the proper number of trades to evaluate 2. Study successful trades and unsuccessful trades a. How well did you follow your best practices In too early/late Out too late/early Few convergence of clues Know what is out of your control (The Market after you open any trade) 3. Review and Journal a. Include back testing and forward testing b. If a system is not meeting it s back tested success levels determine why: is it the market, the system or me? c. Focus on the cumulative track record and not just a handful of trades 4. Trade Less Learn & Earn More a. Fewer Stocks & ETFs Copyright ATTS 2007-2017
For Greater Success Hang in There Is the potential acceptable? Yes, So Hang in there! Trading skills are developed over time! The task is survive until you make it! Copyright ATTS 2007-2017
Habits to Eliminate now Going into 2018 The Worst Habits/Beliefs most Traders Struggle with: The Disconnect between what we Think & Reality! Copyright ATTS 2007-2017
Habits to Eliminate now Going into 2018 The Worst Habits/Beliefs most Traders Struggle with: Copyright ATTS 2007-2017
Habits to Eliminate now Going into 2018 The Worst Habits/Beliefs most Traders Struggle with: 1. Managing Fear & Greed (Emotions) 2. Dealing with Impatience & Lack of Discipline (Ego) 3. Overtrading and Under-trading (Discipline) 4. Failure to establish a comprehensive trading system with clear, concise mechanical rules and put it in writing a. Failure to follow those rules precisely and consistently if they are established b. Failure to back test that system and determine expectancy or profit factor of the system before implementing it What are yours? What can you do about it? Copyright ATTS 2007-2017
Habits to Eliminate now Going into 2018 The Worst Habits/Beliefs most Traders Struggle with: 1. Managing Fear & Greed (Emotions) Preparation, Patience & Discipline Copyright ATTS 2007-2017
Habits to Eliminate now Going into 2018 2. Dealing with Impatience & Lack of Discipline (Ego) Do you have a safety net? Copyright ATTS 2007-2017
Habits to Eliminate now Going into 2018 The Worst Habits/Beliefs most Traders Struggle with: 3. Overtrading and Under-trading (Discipline) Sure way to self-destruct Copyright ATTS 2007-2017
Habits to Eliminate now Going into 2018 The Worst Habits/Beliefs most Traders Struggle with: The Root! 4. Failure to establish a comprehensive trading system with clear, concise mechanical rules and put it in writing a. Failure to follow those rules precisely and consistently if they are established b. Failure to back test that system and determine expectancy or profit factor of the system before implementing it Copyright ATTS 2007-2017
Habits to Eliminate now Going into 2018 The Worst Habits/Beliefs most Traders Struggle with: 1. Managing Fear & Greed (Emotions) 2. Dealing with Impatience & Lack of Discipline (Ego) 3. Overtrading and Under-trading (Discipline) 4. Failure to establish a comprehensive trading system with clear, concise mechanical rules and put it in writing a. Failure to follow those rules precisely and consistently if they are established b. Failure to back test that system and determine expectancy or profit factor of the system before implementing it What are yours? What can you do about it? Copyright ATTS 2007-2017
Questions & Comments
Effects of Fatal Trading Errors Those ill prepared will Fall Prey to the Fatal Errors! - They are victims when something like this happens Copyright 2007-2017 Active Trend Trading Which can be devastating!
Top 10 Fatal Errors 1. Trying to Run Before Learning to Walk 2. Trading Strategies before Knowing the System 3. Failure to Develop a Routine 4. Unrealistic Expectations 5. Failure to Use Price Clues Entries, Exits & Trend 6. Trying to Get Even 7. Psychological Challenges 8. Spread too Thin 9. FEAR 10.Trading too Much/Trading too Little Copyright 2007-2017 Active Trend Trading
Top 10 Fatal Errors 1. Trying to Run Before Learning to Walk - Learning to trade is a process that is much like Golf! Never totally Mastered - Don t mistake beginners luck for skill! - A luring temptress To Avoid: Choose a solid, winning system with a great track record that fits your life style Copyright 2007-2017 Active Trend Trading
Top 10 Fatal Errors 2. Trading Strategies before Knowing the System - The System determines the probabilities for the Strategies - Not using a System is just guessing! To Avoid: Build your strategies around the system! Copyright 2007-2017 Active Trend Trading
System to Strategy Stock & ETF Strategy Option Strategy W&I Strategy SYSTEM Copyright 2007-2017 Active Trend Trading
Top 10 Fatal Errors 3. Failure to Develop a Routine - Like driving without Google Maps! - Flying an Aircraft without using the pre-flight check list To Avoid: The system will contain: routine & quality control criteria linked in a feedback loop that leads to refinements in protocols and best practices. - The objective is to eliminate variables and improve quality of both input and output Copyright 2007-2017 Active Trend Trading
4. Unrealistic Expectations Top 10 Fatal Errors - Understand what it really takes to replace a salary trading - Being under Capitalized - Trend Trading Systems: 20% per year with a 50%-60% Win/Loss Ratio so do the math! - Work Salary: $100K to replace the trader needs $500K in trading Capital - Consistent Stable Monthly Income More like a commission job, prepare for drawdowns To Avoid: Don t think you will be different! Copyright 2007-2017 Active Trend Trading
Top 10 Fatal Errors 5. Failure to Use Price Clues Entries, Exits & Trend - Failing to recognize that there are only 3 types of entries - Breakouts, Pullbacks and the Wrong Entry - Failure to know the Long Term, Mid-Term & Short Term Trends - Arguing with the Long and Mid-Term Trends To Avoid: Apply your rules and trust the technical and the trend Copyright 2007-2017 Active Trend Trading
6. Trying to Get Even Top 10 Fatal Errors - False Belief that the Market owes you something! - Several Loosing Trades makes us doubt the system - Holding on to a loosing trade, didn t follow Rules To Avoid: Understand probabilities. Understand that even a 50-50 Win/Loss system can be very successful if looses are managed by the system! Copyright 2007-2017 Active Trend Trading
Top 10 Fatal Flaws 7. Psychological Challenges - Fear, Greed, Ego, Lust, etc. - Holding onto false beliefs - I don t deserve to win! - Self-Sabotaging Subconscious Conditioning To Avoid: Become a Mechanical Trader. Admit that there may be issues Copyright 2007-2017 Active Trend Trading
8. Spread too Thin Top 10 Fatal Errors - Not understanding trading is a marathon and not a sprint! - Trying to learn something new before mastering past training Leads to a never ending search for the Holy Grail of Trading! To Avoid: A Man s Gotta Know His Limitations! Copyright 2007-2017 Active Trend Trading
9. FEAR Top 10 Fatal Flaws Fear is probably the most significant emotion for traders. Many traders struggle with this emotion and fear can demobilize you from applying your hard learned technical skills. When suffering from fear, you may Cut winners short in fear of giving profits back Hesitate in pulling the trigger because you fear the prospects of a loss Hang on to losing trades because you fear taking the loss Jump into unplanned trades because you fear leaving money on the table To Avoid: Get Help and find a mentor https://tradingpsychologyedge.com/mental-skill-builders/overcome-fear/ Copyright 2007-2017 Active Trend Trading
Top 10 Fatal Flaws 10.Trading too Much/Trading too Little - Forcing Trades believing one has to be in a trade - Too Many Positions (Over 10 is too many for most) - Can t Pull the trigger - Won t do the homework to trade To Avoid: Buy when you should buy, sell when you should sell Copyright 2007-2017 Active Trend Trading
Clarify, Simplify & Multiply This has been the Motto of Active Trend Trading from the beginning! We continuously work to Clarify & Simplify through refinements to the system to make it objective and easy to both learn and use. The purpose of all presentations is to provide our fellow Active Trend Trader Members a jump start to accelerate progress up the Learning Curve. We welcome suggestions on how to improve the learning process! Trade Wisely & Profitably, Dennis W. Wilborn Founder & Lead Technical Analyst
Bonus Slides
SWOTs Strategic Planning Strengths: characteristics of the business or project that give it an advantage over others (What Provides the Edge) Weaknesses: characteristics of the business that place the business or project at a disadvantage relative to others (What Dulls the Edge) Opportunities: elements in the environment that the business or project could exploit to its advantage (Doing our homework) Threats: elements in the environment that could cause trouble for the business or project (External & Internal) Must have Inputs, Activities, Outputs, Outcomes, Feedback Loops & Diagnosis for mid-course correction
Trading Without a Strategic Strategy
System to Strategy to Campaign Stock & ETF Strategy Option Strategy W&I Strategy SYSTEM
The Active Trend Trading System Our Motto: Clarify, Simplify & Multiply Three Point Strategies based on ATTS Strategy I Stocks & Index ETFs Strategy II Basic Options Strategy III Wealth Building & Income Generation Active Trend Trading System
The Active Trend Trading System Our Motto: Clarify, Simplify & Multiply For ANY Market Condition ATTS Shows & Teaches members: Pillar 1 What to Trade (Top Quality IBD Growth Stocks & Top Notch ETF s) Pillar 2 When to Enter: Entry Action Point Pillar 3 When to Exit: Exit Action Points Pillar 4 What Strategy to Use Pillar 5 What to Expect
My Strategic Plan for ATTS Strengths and What Worked 1. ATTS Triggers 2. Moving Average Bounces 3. Waiting for the TSI Turn 4. Seasonality Trades 5. Strategy III Weaknesses and What didn t Work 1. Holding too long 2. Failing to use proper stops 3. Not doing my homework consistently 4. Lack of Persistence and Patience Opportunities 1. Trading IBD 50 and Leveraged ETFs 2. Seasonality 3. Strategy III Threats 1. Distraction 2. Fitness 3. Unforeseen Black Swan Events
My SWOT for ATTS Actions 1. ATTS Just Do It! 2. Wait for TSI Turns 3. Do more Conditional Orders to Enter based on Technical Analysis 4. Plan Seasonality Trades 5. Use Leveraged ETFs both directions 6. Use the IBD 50 exclusively for stock picks 7. Become Intimate with what I trade 8. Become Intimate with all set-ups 9. Complete daily & weekly homework 10. Take the second trade Feedback & Diagnosis 1. Monthly Assessment of trades and P&L 2. Grade Every Trade 3. Journal 4. Have adequate data before making mid-course corrections
My SWOT for ATTS Strategy I Portfolio Building 1. Patiently and Persistently complete daily, weekly & monthly homework 2. Trade IBD 50, Leveraged ETFs & specific identified stocks like TSLA 3. Up to 4 open position at full margin at a time 4. TSI/Momentum Turns Strategy II Options 1. Up to 5 positions 2. Buy or Sell options for cashflow when appropriate 3. Trigger off TSI/Momentum Turns Strategy III Wealth & Income 1. Three Foundation Positions 2. Trade Aggressively when Any Foundation Position is trending strongly 3. Use trailing stops to protect profits 4. Increase Capital Investment up to 30%
Questions