Welcome back to the Coach's Playbook! Today Jack, Dan and Mick discuss 3 ways to gain more consistency in your trading. They also take a look at the pitfalls of loose risk management and acknowledge the extent of their Holiday weight gain.
Tune in next Wednesday at 11:30 AM CT for a brand new episode where you can ask your own trading questions. We'd love to hear about anything that's on your mind.
Have a Plan
You'll see this advice pop up a lot in performance coaching—and there's good reason to repeat it. Good traders have a plan and they know how to follow through on it.
Having a plan is the foundation of your trading, and unfortunately many traders simply don't have one. Remember, trading is a business, and it's important that you treat it accordingly. It can be fun, but also needs to be taken seriously.
Whether you are a new trader, or a seasoned professional, you need to know in advance what products you are going to trade, how many trades you are going to make during the session, and where you are going to get out of both winners and losers.
Physically write down your rules on a sheet of paper so you know what to focus on.
Trading on a simulator is a great way to dip your toe in the water. This will help you learn what entries represent "smart" risks before you start putting real capital at stake. It will also allow you to test strategies so that you can have a real plan when you head to the live market.
If you don't have a plan, you'll just be flailing and hoping to catch a lucky break. That's definitely not a place you want to be.
Use the Same Lens
Mick and Dan advocate using a top-down approach to zoom in on the markets starting with the highest level.
They'll analyze daily and even weekly charts to pick up on long term trends and dynamics within the markets they trade. Next, they inspect shorter time frames, such as the 30-minute chart, to scout for entries.
Whatever method you use, keep it consistent. And remember, as retail traders, we are usually trying to follow the trend. This is not to say that counter-trend strategies cannot work. However, sometimes it's much easier to go with the river, rather than against it.
Build a Routine (and Follow It)
Do you take a shower every morning or the night before? Do you workout or do yoga before hunkering down behind the screens? What do you do each day to prepare yourself for trading?
Successful traders tend to be creatures of habit. This goes beyond the rules that they follow in their actual trading accounts. They usually have routines they follow each day as they get ready to battle the markets.
If you don't have a routine, now is the perfect time to start building one. It may not seem glamorous, but successful individuals from all walks of life (CEOs, Athletes, best-selling authors) swear by it. You owe it to yourself to at least give it a try.