My 2024 Trading Principles

As I prepare for 2024, I’m reflecting on what worked well in 2023, and what I’d like to improve upon in the new year.

Instead of setting “trading resolutions”, I’ve come up with trading principles and a system for following them. The system is a note in Notion which contains these principals, and I plan to review this note at the start of every trading day.

I’ve grouped my principles into three categories:

  1. Rules
  2. Manage
  3. Trades to take

Rules are the most important, because if I break my rules, I won’t be successful as a trader. Some of my rules are: do not go bust, protect my profits, and execute patient entry points.

The manage group contains my weaknesses and bad habits that I would like to fix or eliminate in 2024. This group was inspired by Peter Reznicek’s approach for overcoming trading challenges:

Identify your trading “Achilles heels”, and separate them, don’t think you can overcome all of them at the same time.

Weaken them one at a time, attack each one for as long as it takes until it’s out of your system and then move on to the next one. Find the one that is most egregious, and focus the next day/week/quarter on focusing on eliminating or weakening that issue.

Some of the items in the manage group include: Eliminate hope trades, don’t be greedy, and define my risk in every trade.

The trades to take group contains a list of technical setups that I will be on the hunt for. This list may expand or shrink throughout the year. The current list includes setups such as: Retest of yesterday’s high of day, VWAP holds/breaks, 8 & 21 EMA holds/breaks. I view this list as a guide for trade entry points, and unless I have a very compelling reason to do so, I will strive to avoid trades that do not meet one of the technical setups described in my list.

To close, the final season of Billions had a great line that I’m keeping top-of-mind in the new year:

Exercise the discipline required to do it right.