Stephen Johnson did something crazy this past weekend. No, he didn’t get drunk and wake up in a strange country. He spent the entire weekend running trade analysis on his own data … and learning from it.
That’s right: all weekend long, Stephen pored through his own trading past, looking for inefficiencies and trying to figure out ways to improve his game.
So what did he find? In today’s episode, Stephen shares his trade analysis journey with co-hosts Tim Bohen and Kim Ann Curtin. Listen in to hear about his epiphanies, how he got honest with himself about premarket trading — and what his edge is now.
The Importance of Data
Think of NFL quarterbacks. They might actually only spend one hour a week on the field. It’s everything that happens behind the scenes — the training, the strategy sessions, the practice — that gets them to the Super Bowl.
Trading is similar: it’s all about the behind-the-scenes work.
If you go back through the SteadyTrade Podcast archives, there’s been a pretty consistent message about trading data: Track it. Learn from it. Use it to continue getting better.
So many top traders in the game track their data. Don’t believe it? Go back to the Tim Grittani interview (part 1 and part 2, please). That’s where he shares how tracking and learning from his data served as his big aha moment in trading. He’s now up over $13 million*, thank you very much.
*These kinds of trading results are not typical. Most traders lose money. It takes years of dedication, hard work, and discipline to learn how to trade, and individual results will vary. Trading is inherently risky. Before making any trades, remember to do your due diligence and never risk more than you can afford to lose.
Stephen’s Trade Analysis: Looking at His Strategy
Premarket trading is known to be risky. Stephen does it anyway.
To his credit, he’s in Dubai, so midday trading is more like bedtime for him. He wants to try to trade as early as possible. And he got in the habit of trading when it was convenient for his schedule — premarket.
He thought he was being responsible. Stephen thought his mantra should be “the hardest worker in the room makes the most money.”
Sorry, but not in trading. Sometimes — often — less is more.
Recently, he was watching a DVD by Roland Wolf — a trader who just passed $1 million in profits.* In the lesson, Roland mentions how he used to trade premarket and after-hours … but stopped when he realized his results were incoherent.
This prompted Stephen to look at his own results, and he found some surprises.
What Stephen Found
As the great Tim Bohen says, “there’s no edge in premarket trading.” Stephen was horrified to learn that in his case, it was true.
He was going short too early in the premarket. And in his trade analysis, he found that a good 70% of the time his trades would have been better if he’d timed them after the market open.
Learn how he determined this and why he thinks that from a mathematical perspective, it’s all about getting in early — but after the official trading day begins.
A Closer Look at Stephen’s Trade Analysis
Traders, listen up! Stephen talks about exactly how he tracks his trades and how he analyzes the data.
Learn about the importance of logging your trades on a platform like Profit.ly, the advantages of an app versus just keeping a spreadsheet, and the basic steps:
- Track your trades
- Review your trades
- Review them again
Trade analysis is key to learning where you can improve. Don’t skip this.
Trading Outside of Regular Market Hours Is Dangerous
In the episode, the crew talks about the not-so-secret dangers of premarket trading (and after-hours trading, for that matter.) They talk about specific tickers that have gone “ballistic” and left many traders in a deeply painful position.
You won’t want to miss the discussion about the difference between getting destroyed in the premarket versus being a success story in the live market.
Stephen Analyzes His Trades and Changes His Strategy
So how does Stephen avoid FOMO and keep himself from trading too early? He gets really real: he even resorts to watching “Friends” to avoid being next to the screen!
Tim shares his trading schedule too. He wakes up early, does his research, then has a brief break before the market open to recalibrate and avoid those common FOMO times.
Kim explains how this “integration time” is vital. You let everything seep in, digest, and it becomes the lens through which you view the day.
Adaptability
Patterns can and will shift. Even the best-laid trading plans might need to change after a while.
Tim talks about the trends he’s seen shift in the market. The crew talks about the patterns they’re seeing and how constant trade analysis and observing market trends are a great combo for improving.
Don’t miss Tim’s take on timing and why “the only thing that makes me angrier than daylight savings time is cargo shorts.”
Links Mentioned
Piqued Your Interest?
Stephen used trade analysis to find his edge … What did you learn from his experience? If you have a question or a comment, please feel free to reach out.
Remember: if your question is chosen as an on-air topic, you could win a SteadyTrade mystery gift box. Leave a comment below or on YouTube!
Thanks for tuning in to the SteadyTrade podcast. Stay tuned for weekly episodes featuring the hottest topics for aspiring traders.
Love this episode? Please leave a review on iTunes.
I also have learned the lesson on pre market buying. By a law I don’t trade in pretrade unless it is very very perfect setup.
Thanks for the discussion
Learned not to trade premarket, something I don’t do anyways
Keep a trading journal