Useful Tips for Your Trading Improvement

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5 Deliberate Things to Do to Improve Your Trading

Many traders are simply putting in the hours, thinking that if they spend enough time around the markets, analyzing charts, reading books and studying courses, their skill level will improve. “Putting in hours” is necessary when you are starting out, as there is a lot to learn. But putting in hours won’t necessarily increase your profit potential. If you always do the same thing and make the same mistakes, putting in the hours will just ingrain those habits even more. To improve, make repeated and deliberate choices. Here are five thing to start doing today to improve your performance.

Key Takeaways

  • Trading can be challenging, especially for those just beginning in the markets, but many early missteps can be corrected with education and experience.
  • If you can’t figure something out, ask for help! Even if it seems like a small issue, there are are several resources both online and offline that you can seek out.
  • That said, stick to your guns! Others can lead you astray and lead you to act emotionally instead of logically.
  • Practice, discipline, and focus are key to keep you trading smart and strategically day in and day out.

Get Help

Have someone in your life that makes you accountable for your trading. Call them your trading referee. Lapses in discipline can happen to anyone, so having someone in your life that keeps you accountable will keep those lapses to a minimum and the mistakes less costly.

This person could be a mentor, coach or a just a friend or family member (not necessarily a trader, but it could be) who you’ve told your plan to and who you keep updated on your performance. Often just knowing that you need to show your trades to someone—and those trades have to align with the strategy you told them you were following—is enough for most traders to avoid some mistakes. (See also: Get a Trading Referee and Improve Performance.)

A chat room, forum or regular meeting with people you respect is another option. Share what you are doing, what you are struggling with and what you are having success with. Ask for feedback. Anyone can get sidetracked, so be open to being told when you’ve gone astray. When your own discipline and self-awareness fail, you’ll have someone to help you get on track. Choose your trading referee carefully. Choosing the wrong person can do as much harm as good.

In addition to help from people, there are several online resources for trader education and training, and of course there are also reams of books on the subject that can and should be consulted when in need.

Avoid Other’s Opinions on Trades

Talking about strategies with other traders, or discussing your performance with your trading referee is fine, but avoid the opinions of others when it comes to specific trades. Trade your trading plan, your way. It doesn’t matter if a trader you respect says they are going to buy when your plan says to sell. You must follow your own plan. That is only way you can see what works for you—and keep your stress levels to a minimum.

Constantly changing your mind based on what other people, the news, TV or websites say will cause stress and lead to poor performance. Even great traders make losing trades, so trust your own plan. Avoid discussions while you are trading that could cause you to second-guess your positions, or abandon your methods all together. You put time into researching and creating your strategy. Don’t let someone’s else words ruin all that work.

Practice

A strategy may seem simple on the surface, but even a simple strategy is hard to implement in live market conditions. Every day, every trend, every pullback is slightly different; nothing looks exactly the same as it did in the textbook examples. To get proficient at implementing a method, practice it, a lot. Trade it in a demo account until you consistently see profit from it.

In sports, you do drills to create muscle memory, so you can instinctively act when the time is right. In fast moving market conditions, if you have practiced a strategy, you’ll be able to implement your skill at the right time. If you haven’t practiced, you’ll likely miss the opportunity, enter too early, or make mistakes with your position sizing. Build your skill base in practice sessions, so you’re not learning the hard lessons when real money is on the line.

Mental Clarity, Everyday

Each day take one minute before you trade to make sure you are feeling clearheaded, focused and present. Also take a couple seconds to reiterate that you’re here to trade, not check your social media accounts, email or watch online videos. When you trade, focus on trading. Close your eyes, center your attention on your trading plan and visualize following it. Check the economic calendar to be aware of events that may move the market so you aren’t taken by surprise during the day.

These small steps can save you thousands of dollars over the course of a year. If you’re angry, upset or unfocused, avoid trading. It only takes one day, or just one trade, to lose an entire account when not in the right frame of mind.

Take a few minutes and prepare for each day. Foster a state of mental clarity before you begin trading, and if you can’t establish that mental clarity, don’t trade that day. (See also: Characteristics of Successful Traders.)

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Record Every Trade You Make

Monitor and review every trade you make. Take screenshots of your trades with entries, stop loss levels, targets and your technical/fundamental notes so you can easily review your trades at a later time. A screenshot is worth 1,000 words in a trading journal, because it shows exactly what you did in those exact market conditions.

If you’re a day trader, review your trades weekly and monthly. If a longer-term trader, establish a time where you’ll review your trades, such as quarterly or semi-annually. If your trades last a long time, take a screenshot at the time of the trade, and a screenshot when you get out (showing everything that happened between entry and exit).

Careful review of your trades will show what your common mistakes are—which you can deliberately work to improve (practice)—and what you’re very good at, which you could potentially capitalize on more.

The Bottom Line

Being a profitable trader takes constant work. Profitable trading is not a destination; it’s only a state made possible by deliberate and practiced actions and choices. As soon as a trader stops following those deliberate and practiced actions, they will fall out of the profitable state. Having someone to keep you on track will help keep these lapses to a minimum. So will avoiding the opinion of others on particular trades. Be focused every day you trade, and if you are not, don’t trade that day. Finally, record everything you do, taking screenshots and keeping notes. This will give you definitive feedback you can use to continually and deliberately improve your trading methods.

Useful Tips for Your Trading Improvement

Trading is not an easy task. Yes, there are programs out there that give you hope towards an easy trading process bla bla bla… But, most of these promises are too good to be true. If you love to trade and you know the right way to do it then your life and your future in trading can be saved. This is why you need to comprehend a few concepts towards trading improvement.

Napoleon Hill is an awesome author and he is without doubt a great motivational coach. His popularity is because of his skills in interviewing famous historical figures such as Thomas Edison, Andrew Carnegi, and Henry Ford. Below are some thoughts and quotes by Napoleon Hill that you can rely upon in order to help you in your trading needs. If you have a genuine goal to be a good and successful trader then you need to read and be inspired with his famous quotes and useful advices.

“I am a successful trader” and “What the mind of man can conceive and believe, it can achieve” – Napoleon Hill

Perseverance along with a positive concept in life can definitely get you to where you are heading. If you constantly remind yourself that you are successful at what you do no matter the trials then your mind will surely be set for success. Otherwise, if you do not believe in success, then it will be hard for you to look for ways to achieve it. Belief in oneself is the key step towards success.

The second quote is a very powerful and influential quote. Reading this quote over and over again can transform your life and your trading environment. If you believe that you will succeed in trading then so shall it be.

“I do not become emotionally affected with gains and losses.”

Winning and losing is part of life. You win some and you lose some. In trading earning and losing money is a normal routine. Both can actually affect your emotions and basically change your life when the impact is great. When you lose you may want to seek for vengeance on the market and then try to make that big “come back.” When you have a big win you tend to be over confident and then try to bet or invest higher. Either way, as a trader, you need to be careful with the risks that you take and be careful with trades driven by your emotions. The ideal thing is to go away from the market twelve of twenty four hours after winning or losing a trade.

Practice correct risk management

You have to put in mind that trading comes with huge trade series. This implies that you should not put a lot of focus on a single trade. The idea here is that you must not be risking too much than what you are contented with losses per trade. With this, you have to put in mind that you should put too much risk on your trade. Taking small losses is essential because it is part of the binary options business.

“I will not over trade but instead be patient.”

Trading because you just feel like it is a big no no. You have to understand your real purpose for trading not unless you have unlimited supply of cash. Many traders go bankrupt because of over trading and loss of patience.

“I follow my trading plan in a consistent manner” and “I use a journal to track my trading.”

When you have a plan, especially when it involves money, you need to follow it. Binary options trading is a business and business involves logic. Trading will be quite efficient when you follow a good strategy and you do not deviate from it. Moreover, following a trading journal can keep you on track. You can be ahead than most traders. You must have a record of your performance so that you can have and evidence of your ability.

I follow the market and trade

Sometimes it is ideal to follow. This is applicable in the trading world. You have to trade based on what is going on in the market and not what you think it is doing. You ought to trade with what you see in the price charts and what you assume would happen. At day’s end, your only job is understand reading price action and then you can take advantage and not fights it.

Trade with what rewards the most rather than what gives most risks

Every trader’s goal is to have more rewards than risks. You need to learn how to gauge the market before you actually trade. You also need to ensure that risk reward is one is to one and a half or more rewards.

I consider myself a professional trader

What gambles typically do is they randomly bet on casinos or other places where they can possibly gamble. As for traders, they can be considered gamblers when they do not adhere to a trading edge. It’s as simple as a mouse click followed by many other mouse clicks with the hopes of being lucky in the end. As a trader, you can actually consider yourself as a responsible trader instead of an irresponsible one. You can basically create a trading plan when trading in markets. You have the choice as to becoming a gambler or a trader.

I fully believe in my personal trading strategy

This actually coincides with the very first tip. When you believe in your own strengths then you can have a bigger chance of reaching your goals. It is vital for your being successful in your trading goals when you have your personal strategy. However, you have to make sure that you have tested and proven it in a demo market. You have to remember that if your strategy does not work then you try to find ways to make it better. Most of the time, you become comfortable with your own style rather than following others which you are unsure of.

I will invest in learning more about trading

Learning the basics is not enough. When you invest in your personal education you can surely success at something. Learning more about Binary options trading is not so different. You can learn something new about trading every day and you can be one step better than before.

Three Steps That Will Greatly Improve Your Day Trading

Like mastering the oboe or throwing a perfect spiral with a football, the only way to become a better day trader is through practice. But practicing isn’t enough. It’s only the first step in the three-step process of practicing, reviewing, and adapting that will enable you to dramatically improve your day-trading skills.

Once a day trader knows hows to place orders, calculate the ideal position size, and manage risk and has developed a basic strategy to follow, they should practice the art of day trading so they can consistently and correctly take the split-second actions necessary to make money under fast-moving trading conditions.

Then they need to take the time—on a daily, weekly, and monthly schedule—to review their individual trades and their trading strategy to determine what works and what doesn’t.

Finally, they will adapt their trading plan based on what they learned from their review. These changes will be done incrementally so trades that are carried out based on them can be practiced and reviewed and new adaptations to the strategy can be developed.

Practicing Day Trading

Reading articles or watching videos isn’t enough. Day traders need to repeatedly practice what they are learning before it will become ingrained enough to be useful in making trading decisions in ever-changing market conditions.

Practice isn’t just about putting in hours. It’s possible to day trade for years, putting in hundreds or thousands of hours, and never see improvement because you’re not working on a specific activity.

To practice effectively, focus on a particular activity. This is where the trading plan comes in. A trading plan is a document that specifically outlines how, why, and when a trader will enter and exit trades; how they will control risk; and what their position size will be. It also details which markets will be traded and when.

Practice involves following a plan so that progress can be tracked. If trades are taken based on random factors or psychological whims, then the trading results will take on the same unpredictable and random nature.

Practice day trading one component of the trading plan at a time, in a demo account, until the strategy becomes second nature. For example, you may go through charts and pick out entry points for your strategy. Do this until you can see all the entry points that your strategy gives. Day trading requires quick reflexes and precise timing. Practice so that entries occur exactly when they are supposed to, based on the strategy.

Then move on to placing the stop-loss correctly. Then practice placing the profit target correctly. It could take a couple of weeks to a couple of months to master each element of the strategy. After you get skilled at placing your entry points, stop-loss levels, and profit targets based on your trading plan, start to incorporate other elements of the trading plan. Practice having the perfect position size on each trade (risking 1% of account capital per trade is recommended) and every other trading element the trading plan covers.

While it may sound a bit odd, this whole time you are also practicing what not to do. Your goal is not only to follow your strategy and take all the trades it tells you to take (when conditions are favorable, based on your trading plan) but you are also practicing sitting on your hands when your strategy isn’t telling you to a take a trade.

Trading is as much about the trades you don’t take as it is about those you do.

If your strategy doesn’t provide a trading opportunity, then do nothing. The patience required to wait for a valid trade signal is lacking in most new traders, but it can be acquired through practice. Practice being patient and pouncing when a valid trade opportunity arises.

The length of time traders should practice each element of their trading plan will vary. Typically, you should work on each element of the trading plan for 10 to 20 days. When you have mastered one element, add another, and then practice those two elements for 10 to 20 days, and so on. After about six months, a trader using this approach will have a good grasp of their trading plan, will have practiced their strategy for about 120 trading days, and will have a good idea of how to utilize it in all market conditions.

Over a six-month period, the trader will likely have seen very volatile days, very quiet days, trending days, ranging days, up days, and down days. Practicing in one type of market isn’t good enough. A trader needs to practice trading—and not trading—in all types of market conditions. For this reason, practice implementing the specifics of trading for at least six months before utilizing real capital.

Reviewing Your Day Trades

When you practice and follow a specific plan, you are making deliberate headway toward your goal of becoming a consistently profitable trader, even if the original plan isn’t a good one. The review process is where you get to critique both your ability to follow the plan (what you need to work on) and the plan itself (what changes the plan may require).

Self-review should be done a daily basis, while a trading plan review should be done on a weekly and monthly basis.

Self-review is looking at all your trades for the day and assessing how well you followed your trading plan on each. If you took lots of trades that weren’t part of your trading plan, that is a problem. If you look at the chart for the day and see trades that you were supposed to take but didn’t, that is also a problem. Additionally, look for trades where you may have deviated from your exit plan—holding on to a loss for too long, exiting a loss too early, or exiting at a different price than your profit target. In the future, you should pay special attention to reducing (and eventually getting close to eliminating) these problems.

At the end of each week and each month, go through all of your charts for that time period. Look for problems or areas of improvement within the strategy itself. This is your trading plan review. Ask yourself questions like:

  1. Did the price continue to move past my profit target with regularity? This may indicate that you could expand your profit target, extracting more profit (on average) from each trade.
  2. Did the price stall and reverse just before my profit target? This means your profit target may be a bit too large. Reducing it may actually improve the profitability of your strategy.
  3. Did the price often move just past your stop loss, then start moving toward your profit target again? This is a common problem and indicates your stop loss is poorly placed or the trade is poorly timed. Adjusting the stop loss or looking for a slightly later trade trigger will help alleviate this issue.
  4. Does a certain time of day correlate to more losses or wins? The success of a strategy varies during different parts of a trading day. Stick to trading only during the high-profit times, and take a break during the times you notice poor results.

There are a host of factors you can assess when it comes to your trading plan, but the four questions above will get you started. As you do daily, weekly, and monthly reviews of your trades, you will surely come up with some other ideas on how to improve your own trading and your trading system.

One of the best ways to review your trades is to take screenshots throughout each trading day, with all your trading points on them (entry, stop loss, profit target, and actual exit).

Adapting Your Trading Plan Based on Your Review

After a full month of trading, you are allowed to make small changes to your trading plan based on what you learned from your trading plan review sessions. Trades based on these small changes in strategy should be practiced for another month and then reviewed. Changes shouldn’t be made to the plan before the one-month period, as it becomes very easy to make changes based on individual trades (where anything can happen) as opposed to overall results (which are indicators of true performance).

The issues that arise in your self-review are worked on daily. With the self-review, your only goal is to follow the trading plan, whatever it may be. As the trading plan changes over time, so will your trading, but your goal is still to follow the plan. Your daily self-review doesn’t change the trading plan; instead, you work on your personality traits so you can follow the plan.

Strive to keep monthly trading plan changes small. This allows you to practice the small change effectively and monitor how those changes affect your trading. If you make lots of changes to your trading plan at once, it will be harder to isolate exactly which changes worked and which ones didn’t at your next review session.

The same concept applies to your daily self-review. Work on one problem at a time. Trying to correct too many problems at once means you aren’t focusing on each problem enough because your attention is too widely spread.

It’s better to focus on one issue at a time—and really make progress on it—before tackling the next issue.

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