2024 Recap

2024 has been a very productive year for my trading development. Although I haven't made significant gains, it has been quite educational.

Jumping right into my learnings, I grouped them into three categories:

1. Focusing on the "easy money trades"

This is a concept I got from Lance Breitstein. This podcast interview really changed the way I think about my trading strategy.

The core idea is to keep it simple - don't make your analysis more complicated than it needs to be. Figure out the high probability trading setups and execute those over and over again.

For me, the high probability trading setup is trend trading. I trade in the direction of the trend using the Darvas box breakout system. If perfectly executed, my win rate should average 50%.

A high win rate is important because not all positive expectancy strategies are equal. If you have a  strategy with a 10% win rate, it's very difficult to psychologically handle five or six consecutive losses in a row, even if expectancy is positive.

2. Dynamic position sizing

This was also a key topic in the Lance Breitstein interview. Your strategy should enable you to implement exponential bet sizing.

If a trade moves in your favor, or for A+ setups, you need to really size up the position. This will help compensate for periods of consecutive losing trades.

I figured out how to incorporate this into my trading. I plot hourly trading ranges and scale into positions when price breaks through a key level in the direction of my daily signal.

3. Signal quality

To expand on my scaling strategy, signal quality matters quite a bit. This matters on both the daily timeframe where I look for my entry signal and the one-hour timeframe where I manage my trade or scale into the position.

When the signal quality deteriorates with choppy price movements, I get out. Sometimes price does hit my take profit but there is too much anxiety sitting through price action that whipsaws. I value strong, clean moves where I can decisively enter with size.

On a final note, LoneStockTrader shared his 2024 trading recap via a Twitter post. It's aspiring to see his discipline sticking through his daily routine despite going negative in the middle of the year. My takeaway from him is to have a strong routine, minimize mistakes, and follow your rules closely.