This end of year has been crazy, but really in some of the best ways!

For the last couple of months, I've been getting crushed trying to incorporate something new into my trading: adding to winning positions. It wasn't working, and I've since decided to put this aside to focus on the competition and my year-end goals with what I already know.

But the process of reviewing all those trades has helped me uncover things I was doing wrong technically, not just behaviorally. Things I would not have recognized had I simply looked at my results and moved on.

I want to share something that happened on Wednesday and Thursday because it's a good example of why I believe trade review is non-negotiable, and why learning to reset is just as important.

Wednesday was an incredibly volatile day. I was positioned well in terms of exposure, but psychologically, the volatility almost took me out.

I was in a CRWD downside trade when the stock suddenly rallied. I had a stop in place, but the speed of the move and watching my profits evaporate triggered a lot of fear. I saw price breach my stop area, and rather than follow my planned assessment process, I closed my position.

I was so annoyed with myself. The annoyance was also compounded by a sharp turn of events on JPM, where my put got crushed. So, I took the rest of the day off. I went out for pho, walked my dog, journaled, reviewed some of my trades, and got some sleep. The next morning, I reviewed my work again. And that's when I came to an important realization about how I was managing my trades.

As a trade develops, I adjust my stop to the next area price needs to respect for the move to remain intact. In other words, where can price reasonably retrace without invalidating the trade?

For me, that invalidation level is my stop loss. My rule is to exit on an hourly candle close beyond that level, with discretion to stay for a second candle only if price is moving rapidly back toward my stop line.

Well, in reviewing my trades, I recognized two things:

As a result, I was treating these areas almost like soft stops, leaving myself room to assess what price was doing around them. But what I hadn't recognized was that I was also leaving myself room to negotiate and talk myself into or out of decisions.

Going forward, any adjustment to my stop needs to carry the same authority as my original invalidation. I need to approach it as I would a new position: assess the structure, determine my invalidation, and commit to managing the trade according to that level and my existing exit rules.

Now, here's what happened the next day.

Thursday morning, JPM presented another downside setup, and I was ready to participate.

Within one trading day, I closed my biggest trade to date, making just over $23K. This also helped get me back on track toward my goals for the US Investing Championship and my personal annual profit target. 🥳 🫶🏽

Of course, it doesn't always work out that way. You can do all the right work, come back prepared, and still take a loss. But the important part of this experience wasn't just the profit. It was that I had taken the time to reset, review what happened, and return ready for the next opportunity.

And this brings me to something I've learned about consistency.

You cannot compound on work you haven't done.

Think about that for a moment.

Sometimes I'll review a trade at the end of the day and recognize something I could have done differently. Then I'll wake up the next morning, look at it again, and notice something else. I might even revisit that same trade a month later and recognize something I couldn't see before.

Each review builds on the work I've already done.

That's how you start developing a deeper understanding of your strategy, recognizing patterns in your execution, and identifying things that need to be refined. But if you skip that work because you had a terrible day, you're missing an opportunity to learn from it and compound on that knowledge.

And the same goes for your winning trades. Just because you made money doesn't mean you executed well or that there's nothing to improve. Reviewing your trades is how you find those gaps, whether they're technical, behavioral, or something missing from your rules.

And I've realized that the same principle applies to resetting. I've had to reset myself many times throughout my trading journey. After losses, periods of drawdown, frustration, or feeling overwhelmed. But each time I've gone through that process, I've learned more about what helps me get back to a place where I can think clearly and execute my plan. I've gotten better at recognizing when I need to step away, and I've gotten faster at resetting because I've practiced it so many times.

For me, meditation, journaling, getting outside, and doing things I enjoy beyond trading all help. Sometimes I need to stop looking at charts altogether, go enjoy my life, and remember there's a whole world outside of trading.

Touch grass, as the saying goes. 😂

And I think that's an important distinction. Staying consistent with your process doesn't mean forcing yourself to sit in front of your screens when you're mentally exhausted or overwhelmed. Sometimes stepping away is part of the work. Being technically prepared for an opportunity is one thing, but being physiologically ready to execute is another.

So whether you're having an incredible trading day or one you'd rather forget, don't abandon the work that got you here.

You cannot compound on work you haven't done.

Remember, profits are a lagging indicator. Keep your attention on the work you're doing today to have something to compound from tomorrow!

The volatility has been wild this last week. The overall structure is still bearish, but some of the day to day moves have been huge. For example, earlier in the week the Dow rejected around 52,392 and continued lower, but then we had that huge gap and retracement all the way back toward 53,701 before selling off again.

Even if this downtrend continues, we will still have days and even weeks where price can move up or sideways as digestion or retracement. So let’s take a look at the levels above and below. We want to know where price could potentially travel and assess how it acts when it gets there.

Any attempt at reclaiming 51,618 was rejected, so now price is sitting between 51,618 and 50,492. My thought is that we could see some continuation lower, even if it is not in a straight line.

Dow Levels

51,618: First level above.

52,094–52,392: Hourly levels above if price retraces.

52,748: Larger level above.

53,281–53,701: Larger area above if we get another substantial retracement.

50,492: Next level below.

49,260: Larger level underneath that.

Nasdaq retraced back toward the hourly 50 SMA and 25,783, and then continued selling down to 24,443.

If we are not holding around 24,443, the next area below is around 23,972–23,665. We can also retrace back up, with 25,019–25,175 as the first area above and 25,783 above that.

Nasdaq Levels

25,019–25,175: First area above if price retraces.

25,783: Larger level above.

24,443: Area price is testing now.

23,972–23,665: Next larger area below.

SPX is similar. The next level below is around 7,314, which is also around where the daily 200 SMA is coming in. Below that, I have another pivot around 7,243.

If we retrace, the area above is roughly 7,506–7,629. There is another level inside there around 7,582, but I’m looking at that larger area as a whole. I don’t see us going much higher than that this week even if we do get a retracement.

SPX Levels

7,506–7,629: Area above if price retraces.

7,314: Next level below and around the daily 200 SMA.

7,243: Lower pivot underneath that.

Maybe volatility slows down a bit this week and we start to get a clearer direction. For now, this has still been a pretty wild market, especially with the size of some of these overnight gaps. I’ve been making adjustments to my overnight positions since summer, including reducing exposure when it makes sense, and that has helped a lot with managing those gaps. We’ll see what this week brings!