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A Momentum Trader's New Year's Resolution

Steve Levay
Jan 3, 2013, 11:36 AM


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As most do at the beginning of every new calendar year, I have a few of the standard new years resolutions. I am running a half marathon and losing some excess poundage. But although those two are very important goals, my last resolution far outweighs them in importance: Be a better trader. Not to say that losing weight isn't important, but since I am a trader five days a week for usually 10 hours a day, this one takes the #1 spot.


2012 was a very humbling year for me trading wise. Yes I made money, but I did not perform up to my standards. There are a variety of reasons for this, in my opinion, but I think the main one is that even after 12 years of trading, I haven't quite mastered the “maximize your gains” trade. As I got on the air this morning in our Momentum Trading Mentoring Room I vowed to our listeners that I will become a much better trader than I was in 2012 simply by learning to hold my winning trades a little longer (whether through options or equity positions).


Since Thanksgiving, I have managed a few option trades for up to a week. As a momentum trader, that does not come naturally for me. When you are used to trading in and out of stocks quickly intraday, a week seems like an eternity. Now, this isn't to say that I plan on totally changing my trading routine and going for broke every trade. I plan on tweaking my momentum trading style to allow for a little more wiggle room in my P&L when I believe the trade “is on.”


For example back in November, I bought five Priceline (NASDAQ:PCLN) weekly calls at around 50 cents.  I sold four of them for a small profit, but held the last one until it hit $8! That's the kind of trade I am talking about. A real eye-opening trade that you have confidence is going to work. Because I am so P&L conscious I find that using options will help alleviate my stress level in some trades, since my options account is separate from my equities account.


People get humbled by the market every single day, but for me 2012 was definitely eye-opening. I have supreme confidence that I will always be able to make money as a momentum trader, however the question now is, “how can I make more money without really changing that much?” The answer for me is to just BELIEVE in myself and hold at least a piece of my winning trades longer than I previously would have. If I can do that, I expect 2013 to be a great year.


I look forward to tackling the action this year with everyone in my Momentum Trader Mentoring Room. Happy New Year to all and let's make 2013 a great one!


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*DISCLOSURES: Steve Levay is long FSLR, JKS, FB calls, SSYS calls.

Last Updated ( Friday, 04 January 2013 11:10 )