Tracking Losses, why would anyone care to do it when most traders want to forget about the events ever happening? Tracking Losses could be one of the most important things a trader could focus on in their journey. After all, a trader could win and win and win, but what if they lose? That loss could wipe out every gain they had ever made! Pretty crazy to think about right? Well this is why I want to give some insight on how I have been focusing on tracking my losses more than my wins.
What Gave Me This Idea
As I am beginning my 10th month into trading with real money, I am gradually discovering myself as a trader. Each day brings me new enlightenment. This comes as the famous “Ah-Ha!” moments you hear traders chatting about. My most recent “Ah-Ha!” moment was the other night when I was discussing losses with Stephen Johnson. Losses may seem discouraging at first sight, but it takes a moment to recognize their blessings.
For months I have been tracking my journey on TraderSync. This online journal has made my life SO much easier with its customizable features and its easy-to-use navigation. There is no doubt that I spend a lot of my time analyzing my statistics. But what exactly am I analyzing? My analysis changes based on new “Ah-Ha!” moments.
How Tim’s Top Students Track Losses
Watching My losses grow each month was a major concern for my $3,000 account. Quickly it seemed to shrink down to $2,500 roughly. You can look at the image above and see my Monthly Report on TraderSync. This is current as of Dec. 6, 2020 as I am typing this. When I first began I had some big losses due to technical errors which can be found on my YouTube channel.
After weeks of studying One Pattern I was able to hone in on mastering this skill to become a little more profitable. Was this my secret? It was at the time. But that’s not what I am talking about here. My journey grew stronger and brighter as I began seeing more green days on my calendar than red.
Every day I hear Tim Sykes reminding me to Follow Rule #1 – CUT LOSSES QUICKLY! Sound simple but to most there is a hidden message that seems encrypted to the naked eye…
Kyle Williams (one of Tims Top Students) talks about loss management in a YouTube video but I didn’t understand that either.
Then you can watch how Jack Kellogg analysis his profits and losses at the end of his months too…
…. now my brain is starting to understand the importance of tracking trades. My focus began to narrow in on a purpose…
And then I watched Tim Grittani on YouTube.. after all, if I want to be one of the Greats I must learn from the Greats! Duh!
After religiously studying the above videos.. which videos might you ask? ALL OF THE FUKEN VIDEOS!!!!!! SEVERAL TIMES OVER AND OVER AND OVER SOME MORE!!! …. And because you asked… OVER AND OVER AND OVER AGAIN!!!! AND AGAIN!
Following the Greats
My Next Step in Tracking Losses
Naturally I followed suit. It only made sense to me to integrate their procedures into mine. After a couple more months of losses (after the green months) I wrote out some spreadsheets of my own under Google Sheets to match the traders above. Now why would I do this when I use TraderSync? TraderSync has the same information and that is where I get my statistics to add to the spread sheets. Sounds dumb but the point of it is repetition.
Comparing the images above there’s really no comparison. TraderSync calculates everything automatically for me while I take the statistics from TraderSync and I add them to my Google Sheets Spreadsheet. Although TraderSync has MORE information in it than Google Sheets, I still like to use both.
While I just began doing this at the beginning of November when I switched to trading OTC Stocks, I had my newest “Ah-Ha!” moment. This has been growing into fruition for nearly a year in the making. As I mentioned above, I LOVE focusing on my losses as they can be the best teachers.
Yesterday I Tweeted this…
I had an epiphany after Stephen said, “Aye I definitely need to do that and actually you’ve given me a good idea just to focus on that totally same as you”. This gave me a bit of validation in my thesis which I coined up over time.
How did I get this idea?
History in the Making
Tim Sykes’ #1 Rule is Cutting Losses Quickly and taking singles instead of home runs. Mariana is Tim’s Top Female Student and in a recent webinar Tim Sykes and Tim Bohen had, Sykes called out how phenomenal Mariana is cutting her losses and keeping them small. They both went on to talk about the importance of small losses and how vital it is for traders to keep them small as they grow in their journey because the process will take care of the profits.
Tim is constantly talking about this but it takes time for realization to hit. And as I dove into Mariana’s trades on Profitly, she takes very small losses but she locks in singles. Nothing massive but single after single. She is the definition of what the Tims were talking about. Not to mention she has been helping me realize this too. I always new this at heart and did my best to follow. Fortunately I blindly trusted the process and did my best to follow the rules to stay protected, but as I grow into trading, my knowledge is growing too. Each day I am learning to recognize just what exactly the rules mean and WHY! Recently, as in the last week or so, she said she can get in and out of a trade several times. She can be wrong on a few of them because she keeps the losses so small. Paper Cuts as Tim Grittani likes to say.. and because those losses are so small and the singles are taken, they take care of the losses and turn into profits. JUST LIKE TIM SAYS AND SHOWS! Bizarre! lol not really… But she also told me to get out and then onto the next opportunity.
The Next Step to My “AH-Ha!” Moment
With OTCs I find it easier for me to set a solid risk to reward outcome. Kyle is a great resource to learn risk management and I picked this up from him a bit too. Remember to check out Kyle’s Youtube! Anyways, with specific patterns such as the “OT Swizzle” I can calculate my risk to reward ratio to determine if the risk is worth the reward. To determine if the trade is worth my money, I follow several different indicators but they must equal out to 1 to 3 risk reward. Meaning for 1% of my risk there must be 3% minimum reward potential. This could be 2% of risk for a minimum 6% potential. Either way I look at it there must be good risk reward where I can make at least 1.6% at $1k buying power to cover the potential $16 of commissions. How I determine my % risk I use the Percentage Calculator.
By figuring out the number I am able to keep my losses small. With commissions calculated into the statistics it has allowed me to take better control of my losses. What I also do it write out the ticker, what I did wrong, how I can improve, and the mistakes I made. This is exactly what Tim Grittani did in his YouTube videos and I find it helpful. Another thing I am doing is comparing and reviewing these stats at the end of the month on my Youtube Channel. The more ways I can hold myself accountable, the better!
Repetition is helping too. After the market is closed I head over to TraderSync to type in my daily recap and details. Next I head on over to my spread sheets to retype in the calculations that TraderSync has provided me. Lastly I make a video recap either on Profitly or YouTube along with getting introspective on Twitter about my day. Full transparency is my goal.
Keeping Losses Small
By Keeping Losses small I am able to make up for the loss with solid singles. Of course this is if I follow my rules and patterns as well. Staying as strict to my discipline and rules are keys to my success. As long as I can minimize my losses and lock in singles on predictable and practiced setups, then the process will truly take care of itself and my account should begin to grow.
I am also setting monthly goals that I read daily and several times a day to keep my focus clear!