2024 was an interesting year for the market. Usually towards the end of December, I like to do a deep dive into my trading to see how things went. While I did not meet my goal of triple-digit returns, I did outperform the S&P 500. Let's look at some key lessons from 2024.
Trades: 116 (Including partials)
Winning Percentage: 33.62%
Average Gain: 9.87%
Average Loss: 4.35%
Return Per Trade: .43%
Win/Loss Ration 2.27
Biggest Winners: IBIT, NVDA, ALAB, RDDT
Stock Selection Matters
I've spoken to quite a few traders who have been fustrated with their returns over the past years. By no means was this a broad based rally like the 2020 bull market. If you traded stocks like IBIT, NVDA, APP, RDDT, PLTR, and ALAB, you probably had a great year. However, when we look at the Nasdaq advance-decline line, it's clear this was not a rip-roaring bull market beneath the surface. This was a year where you had to catch the themes that were present: namely institutional adoption of Bitcoin, AI, and stocks that had huge earnings combined with strong price action.
Sit Tight
When we look at my equity curve, you can see that the bulk of my gains came in the first quarter and the last quarter. I wasn't making any progress from March to November. However, I remained mostly in cash and only traded lightly during this time. My goal was to keep my account in tact by strictly managing risk. Then, when the market got hot, I was taking large positions and went on margin. This is what trading is all about-learning when to step on the gas and learning when to sit tight and do nothing.
Adapt To The Market
Legendary trader Kristjan Kullamagi once remarked, "You're not smarter than a 20-day moving average." That quote really hit home this year. Stocks like Palantir, Reddit, and APP just rode their 20-day EMAs higher and higher each day. You would look like a genius if you followed Kullamgi's advice this year. While I prefer to trade off the 50-day moving average, I noticed this theme and listened to the market. This allowed me to play some moves in PLTR, APP, RDDT, and ALAB that I would not have had to chance to take had I waited for a different entry signal.
A Few Good Trades Pay For All Your Losers
I was really embarrassed when I looked at some of my trades this year. I wonder, "What was I thinking?" However, the beauty of trading is that as long as you quickly cut your losers quickly a few big winners will make your year. Big wins in IBIT, NVDA, RDDT, and ALAB more than made up for my many losing trades.
Thank you to everyone who has read my blog this year. I hope you got something out of it and it's been helpful to your trading. I wish you all healthy, happiness, and of course trading success in 2025 and beyond.
Risk right. Sit tight.
-Tom
Full Disclosure: I currently own RDDT and ALAB.
Disclaimer: This information is issued solely for informational and educational purposes and does not constitute an offer to sell or a solicitation of an offer to buy securities. None of the information contained in this post constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person. From time to time, the content creator or its affiliates may hold positions or other interests in securities mentioned in this blog or the associated Twitter and Instagram feeds. The stock or stocks presented are not to be considered a recommendation to buy any stock or stocks. This material does not take into account your particular investment objectives. Investors should consult their own financial or investment adviser before trading or acting upon any information provided. Past performance is not indicative of future results.
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