Work To Expand Trading Education

2020-04-14 | Simpler Trading Team

Traders today must consider many options when it comes to market education and following a trading mentor.

There’s no “one size fits all” choice in the trading world.

Questions to consider when seeking trading education:

  • Have you achieved consistency?
  • Do you have a trading plan and actually follow it?
  • Do you exercise discipline while trading?
  • Are you aware of your trading style and habits?
  • Are you tracking trades to figure out what works best for you and what doesn’t?
  • Are you keeping a detailed record of your trades to determine this?

When you honestly answer these questions you can develop a picture of the status of your trading and the degree of education you need to seek.

All traders, new and seasoned, require ongoing education. It’s important to become more self-aware as you move along and begin to understand the areas where you need improvement.

Work on these areas to boost your trading performance:

Develop A Plan

Traders with a plan can develop a foundation for improvement. Your plan helps you stay on track, and can help in overcoming the emotions that will inevitably crop up as you go about trading. The fear factor is one of the hardest things to address and is something that can make or break you in terms of achieving trading success.

Implementing and following an intentional plan, you can work to minimize the effects that emotions might have on your trading. This leads to being more objective in your analysis of the markets.

Trade For Consistent Profits

Various factors need to be taken into consideration to achieve consistent profitability and a few tweaks to your daily routine may help you achieve this goal.

Be disciplined! This is easier said than done. However, exercising discipline long enough can allow a strict mindset to kick in and take over.

When you’re starting to trade it’s generally preferable to avoid being pulled into big positions and big swings. Smaller positions are typically easier to manage and thus can have a higher percentage of profitability. It is important to consider the importance of each trade equally while weighting them properly.

Eliminate Bad Habits

You know you’re in bad habits territory when you realize you’re making the same mistakes over and over again.

This is very common and can happen when you start to develop bad habits that you consistently reinforce. Examples of bad habits in the making include extending losses by moving stops, constantly leaving money on the table, or exiting profitable trades too early.

The solution here is to clearly define bad habits so you can address them one by one. Walk away a little bit so you are not overthinking it or inadvertently engaging in tunnel vision.

Learn To Handle Trading Losses

Sometimes things don’t go your way – losses are part of the trading experience.

Accepting responsibility and coming to terms with a loss means that you learn to avoid blaming losses on outside manipulators and bad luck. Keep the focus on new set-ups and opportunities, not regrets or what could have been.

Learn to identify when you have an impulsive state of mind – and then learn how to control and manage it.

Avoid Burnout

You’ll definitely know when you start to experience burnout.

Burnout shows when you’re tired, not doing the research, and/or no longer keeping records of your trades. You can feel physically and emotionally overloaded and simply not feel able to sustain the efforts required to come back from trading day losses or deficits.

This state isn’t a reflection on your skill, technique or motivation. Quite literally, it’s a sign that there is not enough “psychological fuel” left in the tank.

At this stage sometimes the best solution is to take a break from trading and get away from things for a while.

You may need to take a step back and clear your head so you can get back to the basics and see things for what they are. Get a fresh perspective so you can push forward with your trading experience.

We Saw: markets rally to recover Monday losses — 

  • A hint of glee in the economy boosted by stimulus
  • Unemployment projections that could kill the glee
  • People all over getting frustrated by isolation

We’re Watching: … trade opportunities any way the wind blows —

  • Travel industry decimated by pandemic shutdown
  • Which FANG stocks will emerge stronger
  • How long rally lasts before pushing toward lows

Need to learn more about the markets? Check out the Simpler Trading community HERE.