Three Tips For Traders Struggling With The Summer Slowdown

As expected, summer is turning out to be a rough period for trading. Unfortunately, between the final weeks of July and the first few days in August, I’ve been grappling one of my longest dry-streaks in recent memory.

For context, the last time I hit my $2,000 daily was about two weeks ago. Beyond that, the last time I finished trading above $5,000 happened almost a month ago and my last truly great home run day—and my best day of 2019—was way back in early June. 

The massive drawdown in momentum, paired with the overall volatility in the market recently, has made reliably trading my typical strategy extremely difficult. While I’ve managed to stave off any massive losses, it’s the lack of positive growth that has really made trading this market a chore.

I spoke about some of my frustration on Wednesday, which saw my biggest red day of the week at about $2,900 on Evolent Health Inc. EVH. IN that recap, I talked a little about my journey to where I am now, why I decided to start trading for a living, how difficult those first few years of account building were and why I am grateful that I can now have these occasional rough patches and still support myself.

I bring that up here because, unlike me, many new traders who are attempting to achieve that same independence don’t have that history of getting knocked down and picking themselves back up again. 

If like me, you are struggling to find good follow-through on stocks that typically perform well, or if you haven’t found success with a given strategy, I would like to suggest a few things that I’ve used in the past to get through rough patches in my trading career.

First, look for help from traders who are doing well with a consistent strategy. My Warrior Trading colleague Mike has had some strong green days in the past week, and I’ve tried to look to him for some tips on how I can improve my approach to this market. I’ve also found some great insight from students in the Warrior Trading chat.

Second, I’ve always been a huge advocate of paper trading as a way of testing out new market strategies. Not only can you explore how to best adapt to changing market environments without risk, but paper trading can also be a good way of letting off steam by attempting home run trades most people couldn’t (and shouldn’t) do in a cash account.

Finally, and most importantly, keep showing up. Even if you don’t intend to make a single trade that day, making an effort to check your scanner and at least see if anything is moving will keep you in the headspace of remaining consistent in how you approach the market.

Warrior Trading is a content partner of Benzinga.