hey what's going on everyone thanks for checking out this video my name is Travis from master the
market and this is going to be a quick video talking about some tips to help you grow your
trading account in 2021 so tip number one is going to actually be to look into the past and
review what happened in the year 2020. so you want to look back and see what strategies worked well
what strategies maybe weren't the best way to trade or invest in the market and on top of
that you even want to look into your past trading data to see what you did well and to of course see
what you can improve on in 2021 so for example if we look at the chart at the bottom of the screen
this is the etf for the s p 500 which is spy and as you can see there was a pretty big sell-off
here in late february and in early march and that was of course due to the worldwide coven
19 pandemic and all of the economy in government shutdowns so we ended up seeing spy fall about 35
from its high up here down to its low of 218.26 and the one strategy that worked really well in
the stock market in the past year was to simply buy the dip now in this case it was a little bit
more than a dip because we did have a pretty big sell-off in the market but by buying into that
dip and buying into that sell-off anywhere down here or even anywhere along the way has started
to rebound it would have been a very profitable way to get into the stock market as the s p 500
ended up making new all-time highs by the end of the year okay so with that being said this is
probably going to continue to be a great strategy heading into 2021 because historically the s p
500 does return about 10 to 11 percent on average per year so buying in the dips along the way
is a great way to get your feet in the water and start investing into the stock market
now with that being said most of the people that are watching this video most likely are
more interested in shorter term trading such as day trading or swing trading rather than these
longer term investments into the general market so to take things a step further when it comes
to looking into your past trading data one of the ways that i like to keep track of that information
is to have some kind of spreadsheet of the trading data such as the one that i have here in this
example so you can see that in this example i'm keeping track of the date the number of shares
the average entry cost the average exit cost whether it was a profit or loss the percent return
the profit return and the loss return as well as the type of trade that it was
and here in the profit or loss section you can see that i'm using a one for
profit and a zero for a loss so that way when you highlight the entire column
down here at the bottom it's going to give you an average out of one
one would of course be 100 accuracy and zero would be zero percent accuracy so in this case just for
these examples it happened to be about 55 accuracy so about 55 percent of the investments or trades
ended up being profitable now also you can see over here under type we have one and we have two
one is the buy the breakout strategy and two is going to be the dip buy strategy and keeping track
of this type of information is a really great way to see what type of trades you do well with
and what type of trades that maybe you struggle with and once you've collected enough of this data
you could start to cut out the strategies that cause you more losses than they do profits and
focus more on the ones that historically you've done the best with in the past now another very
important thing to keep track of is the percentage of your profits as well as the percentages of your
losses so if we highlight the entire profit column here you could see that the average
profitable trade was a return of about 5.9 percent and doing the same over here with the losses
you could see that the average losing trade was about a loss of 10.8 percent so clearly that is
significantly larger than the average profit so if this was your personal trading data and your
personal trading information you could take this and realize that you need to start working on
cutting your losses a little bit sooner and maybe work on also letting your winners run a little bit
further to really start to make the most out of every single one of your profitable trades
okay and that's going to lead me to tip number two to grow your trading account in 2021
and that's going to be to find your niche in the market this is something that is often
overlooked when people get into the market and start learning to day trade or swing
trade many new traders will try to you know buy breakouts they'll try to buy dips they'll try to
short sell into resistance they'll try to trade options and different call and put strategies
and at the end of the day all you're doing is spreading yourself a little bit too thin
and you're going to be much better off by narrowing down your strategies
to only a few that work really well for you and starting to focus solely on those few strategies
so my recommendation to do this is to first start paper trading or practice trading with
some kind of paper trading software for example the thinkorswim platform actually has built-in
paper trading so if you're familiar with thinkorswim and you have an account with them
all you have to do is open up the platform and before logging in with your same login credentials
all you have to do is click this over here to paper money and it's going to give you one hundred
thousand dollars of virtual practice money that you can actually use to practice trading stocks
with absolutely no risk because it's not real money now once you've done that for a while and
you've collected some data from your paper trading like we just talked about a moment ago you can use
that data to start to narrow down the strategies that work the best for you and again you can cut
out the ones that historically have caused you more losses than they did profits so that way
once you start trading in your live account with real money on the line you're going to be focusing
just on the strategies that are going to give you the best chance of being profitable on that trade
now tip number three is going to be to try to kick your bad habits in trading and try to of course
take on good ones obviously this is something that is a little bit easier said than done
but it is a very important step for long-term profitability in the stock market so you might
as well start to practice this now i actually have a full blog post going over some bad trader habits
as well as some good trader habits and if you're interested in reading the full blog
post that's going to be linked down below in the description but just to give you a quick preview
one thing for example that many failing traders do is show up to the market completely unprepared
that means that they're showing up maybe 5 10 15 minutes before the stock market opens
without scanning without looking up different stocks and different information
without looking at any news or press releases without going through different sec filings
and this is definitely a bad habit that you want to avoid and you want to show up to the market
very prepared every single day with a list of potential stocks that you want to trade as well
as a plan for trading every single one of those stocks now on the other hand a habit of successful
traders is to simply study and this can be as simple as watching a youtube video like the one
that you're watching right now reading blog posts or books about trading and investing in the market
it can even be looking into past trades and past charts and patterns so that way you can
use all of that information to better prepare yourself to take on the market in the future
and the next tip to help you grow your trading account is going to be to be patient first and
foremost be patient with your entries and a good way to be patient with your entries
is to simply have a plan and not only have a plan but also stick to it so for example if we look at
the chart at the bottom uh this is the stock mara and we're looking at the one day one minute chart
so this is a short term time frame that you would most likely be looking at if you were
trying to day trade this stock and because we can see that there is a little bit of resistance
up here at about 15 per share being that it's the high of pre-market one way that you may look to
trade this stock would be to buy the breakout over 15 dollars per share or wait for it to pull back
and form some support down below however it's very common for inexperienced traders to see
that at the markets open it starts to trend up and move up towards that resistance
so they start to think to themselves why would i wait to buy over 15 when i can buy down here at
1440 or 1460 and then already be profitable by the time it's breaking out over that 15
resistance that of course is going to cause a loss when the stock does reverse down however if
they would have just stuck to their plan of only buying this if it broke out over that resistance
or pulled back and formed some support they would have been able to completely avoid that loss
and that's exactly why being patient with your entries is a very crucial part of trading
so in addition to being patient with your entries it's also important to be patient
with your exits as well and keep in mind that this is very different from being greedy an example
of somebody being greedy is if they were holding a winning position in the chart and all of the
price action was signaling that now is the time to sell and locking your profits on that trade but
they continue to hold because they want to make a bigger profit and they completely ignore all
of the signals that the market is giving them on the other hand letting your winners run if
they look something along the lines of what we see here with this chart is a great way to be patient
with your winners and to really maximize the potential of every single winning trade so what
i mean by this example on this chart is let's say that for example we bought in at about 12
per share because we saw that there was some trend line support forming and the stock was making both
higher highs and higher lows so even though the stock very quickly ran up to about 14 per share
sure it would have been a good idea to lock in some of your profits in that run but because
this is still holding on to that same trendline support and it's still making higher highs and
higher lows as long as it continues to fall within your initial trade plan there's nothing wrong with
holding on to that winner and really trying to maximize the potential return on that trade
okay and last but not least you also have to be very patient with your overall growth in
the market you have to remember that consistent profitability is not something that's going to
happen overnight it's not only going to take time but it's also going to take practice
and losses and lessons in order for you to become a consistently profitable trader
so be patient with the growth of your trading account okay so i hope you like those tips and
found them helpful if you enjoyed please make sure to give this video a like and subscribe to the
channel so you don't miss out on future videos also if you're interested in taking your day
trading swing trading and even long-term investing education a step further all of that can be found
on my website master the market which will be the first link down below in the description
but anyway thanks again for watching i hope you enjoyed and good luck with your trading
you