When Trading Is Your Career, Consistency Is The Benchmark

Despite strong results peppered through the first few weeks of the month, particularly this past Monday and Thursday, July is proving to be hardscrabble time for trading the market. While I’m still green on the week, I’ve given up a lot of ground on trades that, even though they looked strong, fell victim to choppy trading and even full-on collapse.

Firs the good news, I am up roughly $220,000 on the week, with July looking like another all-green month. Again, Monday and Thursday saw some stellar moves in Net Element, Inc. (NASDAQ: NETE) and Lion Financial Group Limited (NASDAQ: LGHL) that together represent 75% of my gross profits on the week.

But home run trades, no matter how many you may get, don’t represent an overall strategy, and the only way to make a career out of day trading is consistency.

Case in point, Wednesday saw me make one of the biggest green trades of the week in China Finance Online Co. Limited (NASDAQ: JRJC) during the premarket session. Already the leading gapping that morning, I watched the stock as it dipped in the early session before curling back up to above VWAP and took an entry on the first five-minute candle to make a new high at around $26.80.

After that, JRJC took off, breaking $28, $29, $30, all the time I was adding up to the premarket high of $31.45 hoping for the break above $32. But the stock faltered and quickly sold off all while I was holding and I ended up cutting my gains by more than half.

A similar picture cropped up on Friday in Vaccinex, Inc. (NASDAQ: VCNX), which was another leading stock in the morning gap scanner in the premarket. After making a few trades in the premarket, I was able to greet the open up by nearly $2,000.

Unfortunately, the stock pulled a JRJC and, while trying to trade the open at the first candle to top the premarket high, the stock ran into some choppy water and I ended up getting stopped out and heading into the rest of the morning red by -$4,600.

I managed to dig my way out of the hole (only after getting in deeper, a dangerous game to play) thanks largely to the massive volume in Verona Pharma plc (NASDAQ: VRNA) that surging by more than 200% that morning.

Warrior Trading students know I love baseball metaphors. Over the past three months, the market has been training me in the “swing-away” mentality. And while I’m still managing to hit reach the bleachers on some of my trades, the number of grounders, fouls and outright strikes are eating away at my averages.

For those not into America’s pastime, July might be a time for me, and any other struggling traders, to reevaluate how aggressive we should be. In particular, I’m going to try to be a bit more cautious on trading for continuation between the premarket and the open, since that’s been my main drawdown in the week.

Nevertheless, summer markets have a reputation for thinner volume and sideways trading. For now, I’m going to keep an eye on my accuracy and watch for more choppy charts ahead. If inconsistency remains an issue, I’ll moderate my share size and do whatever else it takes to make the best trades I can in the market I’m in. That’s how I manage to make the first few months of the year so profitable, and I can do it again for the remaining innings.

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