Jump to content

Becoming a Better Trader – Fixing Mistakes, Working on Weaknesses


Recommended Posts

 

SMALL FIXES CAN ADD UP TO BIG CHANGE

This may sound obvious, but this is an overlooked area of trader development – identifying weaknesses and turning them into strengths. It’s one of the reasons many trading mistakes are made over and over and over again. Even fixing the little stuff, making tweaks here and there can add to up to a big difference. Fixing a mistake in one area can help remedy a problem in another, and so on, it’s a process.

Whether you are a new trader building a foundation or an experienced trader struggling (happens to the best), here are 4 ideas to help you Build Confidence in Trading

IT STARTS WITH KEEPING GOOD RECORDS, JOURNALING, AND REVIEW

Without good records it is very difficult to pin-point problems let alone fix them. Going through your trade history can help you quickly see what you need to work on. For example, you can calculate risk/reward ratios, or see that you make money specific types of trades but lose on others.

In addition to looking at your trade history, a journal will help in identifying behavioral patterns which may need fixing. These are the hardest to remedy, but you can’t begin to address them if not brought fully into the light. The process of review should be done periodically, even if only once a week it can go a long way towards making progress.

We understand the difficulties of trading, which is why we’ve put together a variety of guides designed to help traders of all experience levels.

TAKE IT SLOW AND DON’T OVERWHELM YOURSELF

This will depend on your experience level, but you likely have several areas which need work. And that is OK. The key here is that you take it one step at a time and go slow. By trying to tackle all your issues at once you will become overwhelmed and frustrated.

Start with the most important. These are typically problems related to risk management. A topic we discuss weekly, for more check out this webinar dedicated to risk management. While talking about risk, another point to make is that some problems cross over into other facets of your trading, and so fixing one problem helps fix another.

For example, by trading within your personal risk tolerance you will avoid both larger drawdowns and find it easier to stick to predetermined stop losses and targets.

BE PATIENT WITH YOUR PROGRESS

There will be setbacks. Trader development is a process and can be a frustrating journey if not handled properly. So, don’t go hard on yourself if it takes longer than you like or think it should. Just be persistent and take it slow. If you find that along the way you start to slip and regress, take a step back, and, if needed, take a little time off to regain perspective.

It’s our competitive nature to want to push on through difficulties, but often times the best approach is to stop struggling and further tangling ourselves up in a mess. The problems and their solutions are more likely to appear when not trying too hard.

For the full conversation and examples, please see the video above…

Enjoy the video? Join Paul or any of the team’s analysts live each week for webinars covering analysis, fundamental events, and education.

Past webinars you might be interested in: Handling Drawdowns; Risk Management; Analysis, keeping it simple; 6 Mistakes Traders Make; Focusing on the Process; Building Consistency; Classic Chart Patterns, Part I; Classic Chart Patterns, Part II; Trading Breakouts; Trading Pullbacks; Combining Breakouts & Pullbacks

---Written by Paul Robinson, Market Analyst. 1st June 2022 | DailyFX

Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • image.png

  • Posts

    • Web3 wallets have reinstated asset control to crypto enthusiasts, causing a paradigm shift from the regular central authority exerted by traditional exchanges. Web3 Wallets like Bitget Wallet has taken a step further to raise the security standard, ease of use, and overall user experience. Following the swift expansion and adoption of Bitget Wallet ecosystem, and in the spirit of celebrating its 6th year anniversary,  the team has launched an exclusive Merch giveaway. This opportunity opens up as one of the exciting opportunities available on the Wallet, and only requires simple task participation to be eligible: • Follow the official Bitget Wallet X account @BitgetWallet • RT + comment #BitgetWallet6Years • Give insightful feedback about Bitget Wallet and stand a chance to win Bitget exclusive merch like T-shirt, Cap, Hoodie and Wristband • Fill in the form: https://docs.google.com/forms/d/e/1FAIpQLSd2vHpF8sg-f4putq-suYxSRpGVhxce3EXHKZy3D1Kf0ejRDQ/viewform?usp=send_form This event lasts from May 18th 16:00 – May 21st 18:00 (UTC +8) Guys be sure not to be left out!
    • I have traded £/$ option for a few years but wondered if anyone can tell me why IG option prices fed from UBS Bank have drastically departed from the Black Scholes Pricing model recently, which it used to conform with? Whilst this is an OTC mkt IG have informed me in the past that they "follow" BSM pricing, which they used to do by and large but now:. Example: £/$ Sept 13100's: Call Option mid: 31. Put Option 510. BSM pricing model price on £/$ Sept 13100's:  Call Option 71  Put Option 343. Thanks.
    • DAX 40 showing first signs of possibly soon losing upside momentum Last week’s lows are line in sand for short-term uptrend. Source: Getty Images   Indices Shares Market trend DAX Stock market Candlestick Written by: Axel Rudolph FSTA | Senior Financial Analyst, London   Publication date: Monday 20 May 2024 15:51 In the medium- to long-term it pays to invest in stock indices when they hit record highs Last week the DAX 40, among several other international stock markets, hit a record high close to the minor psychological 19,000 mark before consolidating. But is now the right time to buy into the rally? Even though many investors are getting increasingly nervous, after all US stocks hit a new record high 23-times so far this year, historical analysis shows that investing when the stock market is at an all-time high is a medium- to long-term profitable strategy. According to an article written by IG Chief Market Analyst Chris Beauchamp “the US stock market hits new all-time highs more frequently than one might expect, with new records being set in 30% of months since 1926. On average, 12-month returns following an all-time high have been 10.3% above inflation, better than the 8.6% for periods not at new highs.” He also states that “the impact of avoiding the market after new highs can be severely detrimental to long-term wealth creation.” Data from Schroders shows that an investment in the US stock market in January 1926 would have created a 7.1% annualised return by the end of 2023. But is now the right time to buy into the Dax 40 rally? Last week’s new all-time high in the DAX 40 has been followed by a bearish ‘Dark Cloud Cover’ on the Japanese daily candlestick chart which promptly took it down to last week’s low at 18,628. On the front month June DAX 40 futures contract an even more bearish “Engulfing” pattern was formed. This in itself is not an issue but if a daily chart close below the 18,628 low (18,708 for the June DAX 40 futures contract) were to be made this week, at least a short-term corrective move lower is likely to be seen which could then be used to jump on the DAX 40 medium- to long-term bullish bandwagon at lower levels. Daily DAX 40 Candlestick Chart Source: TradingView The fundamental reason for such a possible retracement lower rearing its head could be triggered by Federal Reserve (Fed) commentary over the course of this week with perhaps some members re-iterating the “rates higher for longer” scenario and pushing back rate cut expectations. DAX 40 technical outlook From a technical analysis perspective, the fact that on the weekly, daily and hourly candlestick charts negative divergence can be spotted, does increase the odds of a minor top being formed in the current strong DAX 40 bull market. Negative divergence occurs when a new high on the underlying asset, in this case the DAX 40 hitting a record high last week, is not being accompanied by a higher reading of an indicator, such as the Relative Strength Index (RSI). When this happens, in more cases than not, at least a short-term correction against the trend usually takes place. In the current DAX 40 example such a bearish scenario would only become confirmed if at least a daily chart close below last week’s low at 18,628 were to be seen (18,708 on the DAX 40 June futures contract). Weekly DAX 40 Candlestick Chart Source: TradingView If this were to happen, the late-April high slightly above the 18,200 mark, the 55-day simple moving average (SMA) and October-to-May uptrend line at 18,140 may present a better medium- to long-term buying opportunity for investors than current levels. All bets would be off if a new record high were to be made, though.     This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
×
×
  • Create New...
us