I hope you had a great Christmas and over ate as much as I did. It’s that time of year again when many rules typically go out the window, particularly dietary ones, and we spend the next few weeks feeling guilty about it and thinking of ways to put it right, mostly by joining a gym for a few weeks in January. How about we apply the same logic to our trading, only this time we don’t quit in at the end of January. Did you break any trading rules last year? Is there any element of your rules that could be improved? If you can find just one thing that could improve your trading system, the start of a new year is a great time to put them right. If your account didn’t grow in 2014 the way you expected then something about your current regime needs to change if you want a different outcome in 2015.
What needs to change?
You need to ask yourself a few hard questions (maybe read a previous post from a few weeks ago titled ‘Top 5 toughest things about trading’ to help get you started.) Some other questions you could answer are.
- What was your most profitable strategy?
- Do you have a strategy you fully understand?
- What was your most profitable timeframe? (entry timeframe)
- Did you use a consistent stop loss strategy?
- Do you have a stop loss strategy?
- If you trade multiple markets (FX, stocks etc.) which was most profitable?
- How many time did you break your entry rules?
- How many times did you break your exit rules?
- How different (%) would your account look if it weren’t for your interfering?
(It’s unlikely you will know the exact answer to no9 but most people we coach here @MMC™ will always say they would be much better off if it weren’t for their own interfering)
Join a ‘Trading Gym’
You need to find your weakness and work on it just like you would a body part in the gym. If you answered the above questions honestly you will know what it is you need to work on, if you’re not sure get a personal trading trainer. Unfortunately there will be a lot of traders who can’t answer the above questions because the only record they keep is their trading account balance. This tells us nothing and certainly will not help you work out whats going wrong, so if that is you then your big resolution for 2015 is to start keeping a full trading journal. You need to track every element of your trading, just as you would any other business. To help you do this, look at using services that can help you automate your record keeping as much as possible. There a number of services now that can connect to your trading accounts and help produce detailed stats based on your trading. Having this information will help pinpoint weaknesses in your systems.
Not got a 'personal trading trainer'
Click here and speak to our team to see if we can help.
By Ray Gilmour