Many traders are content to simply passively experience their trading, reading articles and books, placing trades, and hoping for the best. If I really want to improve my trading though, I’ve found I have to take an active and deliberate approach. Below are three activities that I’ve found useful to improve my trading.
Ask For Help
Trading can be a lonely business, but one of the best ways to identify your trading mistakes is to ask others. Sometimes we are just too close to our trades, and this is where the opinion of another trader can help to point out possible errors in our trading system and plan. If you have some trading buddies you should always be ready to reach out to them and exchanges ideas and charts to get a better handle on your trading. Even those who don’t have trading friends can utilize the various trading forums available on the web. And if you have the money to do so, consider hiring a trading coach. Preferably someone who has years of market experience and who will keep you accountable.
Stick to Your Strategy
Always avoid the temptation to change your trading strategy based on someone else’s trading strategy or opinions. If you can’t do this, then simply avoid reading the trade ideas of others, and even watch out for stories in the financial press. You need to have your own strategy, and you need to have confidence in your strategy. Even if you are struggling, you are unlikely to find relief by switching to the strategy someone else uses, simply because it isn’t yours. Note that this does not include coaching and mentoring. If you have a coach or mentor you should always consider their ideas and opinions, but never make huge sweeping changes to your trading strategy.
Monitor Every Single Trade
There is no way you can improve consistently if you don’t keep a record of all your trades, whether they are winners or losers. This should include your market analysis, charts, and anything else that had an influence on your trade decisions. Don’t stop there though. Every weekend you need to go back over your trades for the week and see where you went wrong, and where you went right. Also look for missed opportunities or deviations from your trading strategy and plan and try to improve your trading thought process every week. Only by deliberately looking at your trading like this will you be able to make improvements on a consistent basis.
You may have already noticed how all three steps are tied together as a cohesive whole. The first step will ensure you make a plan and that you follow through with that plan. The second step removes things that could tempt you to deviate from the plan. The third has you reviewing your plan regularly to reinforce what you’ve accomplished in the first two steps.