Managed Aggression
by Cliff Clark
Is being aggressive an asset or liability for a trader? When I first came into trading during the internet boom era (1998-2001) I came in guns blazing. I bought every dot-com company I could find. It didn't matter what it was, if it had dot-com in the name I was in. I was very aggressive as most notice investors or traders are when they first come into the business. I ran a modest account into a very large account and then all the way back down. I was being far to aggressive for the investments I was making. I call them investments because at the time, trading by novices such as myself was just taking off. I didn't have a trading platform, they didn't exist at the time, if they did they were in their infancy. I was basically trading with no idea what I was doing, chasing the next hot stock. I was being far to aggressive for my level of knowledge.
Over the years I learned a lot of lessons, mostly the hard way. That prompted me to get an education. Along the way I learned that I had to tame my aggressiveness. It was the hardest thing for me to master. In addition to being ultra aggressive, I had little patience and operated on emotion most of the time. Not a receipt for the makings of a good trader.
Aggressiveness for most traders is a liability because they haven't gotten the proper education and have no plan. They are basically chasing the next hot stock. This can work for awhile but in the long run most of these people will go broke and give up.
Aggressiveness becomes as asset when we learn to manage it. A well documented trading plan can help in managing aggressiveness. We then have what I'll call managed aggression.
Over the years I've been able to tame my aggressiveness and turn it into managed aggression through my trading plan and trade checklist. If you are overly aggressive and have big dreams learn to tame your aggressiveness. It's the best path to profits.
2 trades for me today with +1.5R total
1st Trade QCOM +2R
148.39/149.97 exit 143.25
12% gap down under pivot support and 50ma after a strong daily double top rejection,. I took it on a congestion breakdown with a fairly wide stop, leaving my 2R target 50c over its ATR, slow but consistent move down with great RW, hit my target on the penny before it bounced.
2nd Trade AQB -0.5R
9.40/9.70 exit 9.56
I rarely trade stocks under $10 and even more rarely short them. I liked this daily chart as it broke its uptrend channel and stayed under a strong 9.50 support line enough room to its daily 50ma. I entered after a pullback with a fairly wide stop but only 1/3 of its ATR used at the time. It failed to break down with the strong market open and stayed in a narrow range.
I actually broke my plan with this trade as I lowered my stop to a pivot where price made a big bounce earlier at 11am with a large seller sitting there. My thought was that if it breaks that level again then it will likely...
1 trade for (-1R)
I took a BD on QCOM. I was worried about the target being close to the daily range, so I took a tighter stop on the 2 min chart. I am looking through PTS right now, most of the examples have 2 options for where to put your stop. It looks to me like one of the stops would be at the bottom of the main consolidation area, and the other at the bottom of where there has been a shakeout or turnaround bar (if there has been one). Due to the daily range I took the tighter one on this. In hindsight it seems obvious to take the wider stop, but in the moment it looked ok.
I was then looking at the 15 min 3BP on QCOM, but the reason I used a tighter stop in the first place was because of the range. The 15 min 3BP would have needed to have gone even further than the wider stop on the 2 min BD, so I didn't take it.
