51 Trading Tips For A Profitable 2017

These 51 trading tips are full of actionable strategies and tactics based on lessons learned trading the past year.

51 Trading Tips for 2017

As we head into the new year, take some time to reflect upon the past year and turn those reflections into strategies with tactics that supercharge your trading results.

The following tips are a mix of current market specific tactics and strategies that should always be in the trading arsenal. They were developed after a fantastic year of trading in 2016. Without further ado, here are 51 trading tips for a profitable 2017.

51 Trading Tips for a Profitable 2017

    1. Ride the trends. It was the year of the trend. Specific trends. Know what trends are in play and don’t give up on them early.
    2. Make a list of key ETFs and monitor them daily. This will give you a pulse on the market and what’s moving. It simplifies the process. Heading into 2017 key sector ETFS include: SPY, XLE, XLF, RSX, SMH, IBB, IWM, QQQ, USO.
    3. Monitor key setups and assess if they continue to work. I have a basket of setups and go to what’s working. In 2016 the goto setups were continuation setups, breakouts and parabolic shorts.
    4. Build a strong watchlist. The stronger the watchlist, the stronger the trades. It’s as simple as that.
    5. Watch the 9-ema closely in momentum markets and stocks. Lately momo stocks trade around this key moving average. Watch for holds that lead to continuation moves, and breaks that lead to reversals.
    6. Create daily habits and routines. A trader who does not have daily habits and routines is trading like a chicken running with it’s head cut off. As a swing trader, create specific process for actions like scanning, watchlist building, market analysis and reviewing trades. Do the same things every single day.
    7. Meditate 5 minutes before the open. If you are like me you experience a rush at the open, which can lead to bad trades. Five minutes of quiet meditation helps slow things down. If you don’t meditate, listen to calming music or read a few pages of a book.
    8. Never micro-manage your positions. You’ve done the hard work of analyzing the stock, entered on the setup trigger and planned risk and trade management post entry. Now stick to it. I don’t know one successful trader that regularly deviates from the trading plan.
    9. Use Twitter wisely. Twitter is great for gauging market sentiment, community and even finding a few stocks that you missed during watchlist building and scanning. However, do not fall down the rabbit hole and get sucked into using it as a primary trading tool. There is just too much bad advice and manipulation.
    10. Always stick to the plan. We touched on this in our micro-managing discussion. However “the plan” is more that just part of the the trade. Stick to your macro plan as well, as it pertains to your trading style, time frames, routines and setups. Do not jump around from macro-plan to plan just because a few trades don’t work or you are in a drawdown.
    11. Position size like a grinder. Winning traders grind over time and manage risk like their lives depend on it (your financial life does!). Do not get greedy and make big bets. You may win one or two, but over time the big bets will crush you.
    12. Journal every single trade. Humans learn from the past. You must journal every single trade you make so you can study your trading patterns and improve as a trader. Don’t procrastinate and tell yourself you’ll journalperis your trade tomorrow, because there’s always another tomorrow and pretty soon you’ve gone 100 trades without journaling.
    13. Review your trades monthly. Study the patterns. Tag your setups and find out what’s working and what’s not. Figure out what you do well and replicate it. Find yours trading leaks and fill them. Devote more time studying your own trades than studying setups or reading trading books.
    14. Analyze the trades you didn’t take. Business people talk about the “opportunity lost” and it’s no different in trading. Every trade you take means there’s a trade you did not take. Study stocks from your watchlist that ran and ask yourself why you didn’t take the trade. You will learn a lot from this analysis.
    15. Apply setups to the optimal market. We have a big toolbox of setups. These setups are proven and effective, but only if you know how and when to use them. Many focus on the how, but few on the when. Trade the setup only under optimal market conditions.
    16. Do not waiver during drawdowns. Traders trade probabilities with slight edges. There are very few 90/10 probabilities. Most breakdown as slightly above 50/50 to 65/35 split. Even high probability trades will lose 4 out of 10 trades and the wins don’t always come in a nice 6 to 4 ratio. Sometimes trading correctly still puts you on the wrong side of the probabilities and you go through a 8 out of 10 trade drawdown. Do not waiver. If you are trading correctly you will get back on the right side of the probabilities. Short term thinking crushes most traders.
    17. Control your emotions. In poker it’s called tilt. A player plays correctly, loses and gets angry. No longer is he playing the odds or his opponent, but instead for revenge or to satisfy his emotions. Never trade on tilt. Remember you can’t stop the emotion, but you can control it.
    18. Exercise, sleep and eat right. Trading is a decision making game. Optimal decisions are made when the body is rested, primed and fueled. Almost all of the successful traders I know make it a point to exercise, rest and eat healthy.
    19. Be your own mentor. You have acquired vast amounts of trading knowledge. You are reading this so I know you’ve learned from the best! Now use this knowledge to coach yourself. Write in a journal everyday. Create 3 columns for the good, bad and key takeaways. Don’t be afraid to be hard on yourself, but also praise your wins and try to replicate them.
    20. Check the market trend and what’s under the hood. Do not trade in a vacuum. Understand not only the market trend, but also what’s going on under the surface, at a deeper level. I call this being “at one” with the market. Once you’ve reached this zone, setups no longer matter because the entry is not as important as knowing where to be in the market.
    21. Take partial profits. The exit is the most subjective aspect of trading. It’s where traders feel the least control and where most “mental game” issues like micro-managing come into play. Combat this by taking partial profits. This keeps you in the game if a bigger trend move is in play.
    22. Trust the process, not short term results. Our talk of drawdowns and probabilities applies here. Trust the process. That’s what you focus on in the now. Results are examined longer term. A good process leads to good results over time. A winning trade is not necessarily a good trade if it was not traded correctly.
    23. Never trade hope. If you are in a trade because you hope it works out, get out right away. Trade setups, markets, trends and probabilities. Never hope.
    24. Never complain about the market. Try this: do a 30 day experiment and don’t complain about the market or stocks even one time. I am willing to bet you will be in a better frame of mind and you will see improved trading results.
    25. Trade around support and resistance. This keeps your risk ratios in check, helps with trade management and keeps you from chasing. That’s the power of support and resistance.
    26. Don’t be afraid to re-enter positions. Mr. Market is keen on faking us out before making the big move. Don’t miss out on a momentum trend because you were stopped out the first time and were afraid to pull he trigger that second time.mar
    27. Know pre-market highs and lows for intraday trades. This was my big day trading takeaway from 2016. Big moves are made when those -remarked levels break.
    28. Turn FOMO into an advantage. How can a trading leak turn into an advantage? By understanding it and flipping it. Ask yourself what the dumb money is doing and wait for that next setup after the FOMO stage. You will turn into the smart money.
    29. Gauge market sentiment. This is especially important when the market is overheated or in panic mode. Use sentiment for counter trend trades.
    30. Know your catalysts. Understand the “why” of the move. A stock that’s moving because of sector rotation is likely to move much further than a stock breaking out on a rumor.
    31. Smile more. I’m serious. I make myself smile during the trading day. It puts me in a better mood and make me trade better.
    32. Keep a positive attitude. Glass-half-full traders stay the course and are less likely to deviate from winning strategies. A negative attitude leads to negative results.
    33. Walk and reflect. Many of the tactics  in this post came from reflections during my daily hike.
    34. Do not chase trading goals. This is a big one. Daily or monthly PnL goals lead to poor results. Instead of trading the market or setups, you will trade your own profit targets.
    35. Learn from failure and put it behind you. We have focused on drawdowns that occur when you are trading properly. However you will make trading mistakes. Even the best traders fail to trade perfectly. Learn from bad trades and move on. Don’t dwell on the bad.
    36. Remember that you love trading. When in the grind sometimes it’s easy to lose site of why you live trading in the first place. Take a step back and appreciate the trading game.
    37. Continue to monitor key momentum industries, including steel, coal, commodities, oil, energy, biotech, defense, airlines, finance and semiconductors. Apply toolbox setups to stocks in these industries.
    38. Pay attention to how the market reacts to new rate hikes. Specifically, how does it impact trading, housing, building materials, finance and real estate.
    39. Know the 2017 headlines. With Donald Trump as President, you can bet there will be plenty of stock market over reactions to many of his off the cuff  and strategic statements. There’s no need to read articles or become a news junkie, but know the headlines.
    40. Analyze price action response to the headlines. Price does not always react to news as we expect. Know the headline, but trade the price action.
    41. Keep it simple stupid. Trading in 2016 illustrates the importance of simplicity. Trends are not complicated unless you make them more complex than they need be.
    42. Adapt to changing market conditions. I guarantee there will be some major surprises in 2017, just as there are every year. Adapt to unpredictable events by digging into your toolbox and pulling out the tools that work under the changing market conditions.
    43. Use earnings season as a market gauge. While we trade earnings setups, earnings season also is used to get a feel for the health of the market. If good news is met by selloffs, you know the market is weak.
    44. Monitor the FANG stocks. The new “four horseman” (Google, Amazon, Facebook and Netflix) did not lead in 2016. Historically, all four of these long term momentum stocks come back with vengeance after slow periods. Stalk them for the beginning of the next momo move.
    45. Look for bottom formations in beaten down sectors. Solars and gold are beaten down but will eventually bottom. Look for signals.
    46. Scan breakout continuations. A ton of stocks will break out in 2017. Most will end up falling to the wayside after initial bursts. Spot the continuation moves and ride them.
    47. Think volume before price. I always look at the volume pattern of a chart before price. Volume often predicts price action, and confirms once price makes it’s move. Understanding volume will up your gains by at least 10 percent.
    48. Do not forget the time frame you are trading. When swing trading, it’s easy to get caught up in faster time frames. Usually this is just “noise” for you trade. Ignore the faster time frames and stay focused on the daily.
    49. Continue to learn. Trading is not static. Strategies and tactics are always changing. For example, 5 years ago the 9-ema was not significant for my swing style and timeframe. Now it’s the moving average I monitor most closely. Learn by spending at least a half hour every day looking at the market in new ways and by analyzing patterns you see in your own trading.
    50. Experiment by paper trading. I always paper trade. It’s how I develop, study and implement new strategies. I do not use real money on new strategies until they pass the paper trade test.
    51. Study one new thing in 2017. I do this every single year. I pick one area that is new to me for mastery. In 2016 it was premarket trading. This coming year I am working on 2 specific options strategies. Investigate an area in trading you feel could be profitable that  you’d like to master and attack it.

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