Climbing the path of improvement
All of us want to keep improving in our trading, so how can we keep continuously developing? We achieve this by building on our strengths and working on or around our weaknesses.
The first thing to do is to be brutally honest with yourself and reviews these key areas:
- Your Profit and Loss
- How do you trade? (Entries, risk, and exits)
- What are your strengths?
- What are your limitations?
- What do you need to improve
Be honest in your evaluation. What kind of trader are you? Intraday or more positional. In the same way that some athletes are sprinters and others are long distance runners work out and decide which trading style suits you. Once you have evaluated yourself soberly, now look at how to take your trading to the next level.
- Imagine what the trader that you want to be looks like. What behaviour would you have? How would you trade? Now imagine that trader is given a score of 100.
- Now evaluate what score you would give yourself out of 100?
- Then ask yourself, how did you get to point 2? How did you become the trader you are?
- Now say to yourself, how do I improve my score by just 5 points.
We can then focus on our strengths and work around your weaknesses. Now, your temptation will be to purely focus on your weakness, don’t. The key to your trading greatness will probably rely on your strengths being used more. Now, as a child I played soccer in the UK and I was right footed. I worked on my left foot over and over again until I could kick with both feet. I worked on my weakness and I was a good footballer. However, for me , my strength is my ability to speak. I have always been a good speaker, so I focused on my strength of public speaking and I became a great speaker, the go to man when something needed to be said publicly. I know now that you should pursue your strengths more than try and correct weaknesses. If necessary, work around them. We are a tennis family with everyone, apart from me, being very good at tennis. So, if you look at Rafa Nadal when he plays he used to run around his backhand a lot to try and hit as many forehand shots as he can. Why? Because he has a wicked forehand that puts so much topspin on the ball it rips up and high and into his opponent. He plays to his strength unashamedly, you should too. So, yes improve or work around your weakness but your number goal is to play to your strength. What’s your niche? Where are you killing it in your trading? Work it out and do it more.
Play to your strengths
So, on that point again – work on things that are right and good, don’t just be working on your weakness. Are you having lots of winning trades by focusing on the squawk during the day? Well, do it more. Perhaps, you notice that you are a brilliant positional trader and when you hold trades for a week or more you tend to have a higher percentage of winners well pursue that. So ask yourself, ‘what went well today/this week/this month?’ Well, do it again next day/week or month.
Don’t ignore your weakness
Have you lost money from poor risk management? Well, address it. Have you been trading in a too emotional state, well think how to manage those emotions.
Write down your new approach
Finally, jot down a new approach that you are going to take going forward.