Some of these may surprise you, others not so much. But if you want to get off on the right foot here are my suggestions for you.
Get off to the right start on the day with a bit of exercise.
Even if you just go for a walk, start each day by doing something. There is a proven link between exercise, wellbeing and brain function. It should be the first thing you do ahead of anything else, each day. I find all my best ideas come first thing in the morning when I am exercising with no distractions and a clear mind.
Make the time to do it, there should be no excuses.
With a huge sense of irony, too many people blow their trading banks by trying to avoid a loss. Losses are part and parcel of trading.
Profiting long term is all about getting a positive expectancy, therefore expect losses and account for them. After all my time in the market, I still lose about 2/10 races on a market that I understand wonderful. Losses tend to occur for reasons you can’t control and are inevitable, account for them in your expectancy.
Don’t judge yourself by others
I’m often guilty of making people do this, not by design of course!
I still get a huge buzz when I pull in a decent result and in an industry stuffed full of misleading claims, I’m always keen to show that I actually really do this. When I really go for it, that allows me to pull in something special.
But of course, the results you see are years of experience and knowledge compressed into a few minutes, usually with larger stakes than the average person is using. That said, the stakes I use are generally a lot smaller than most people think. If you do more than one trade, even a small bank can yield good results.
Everybody has a very personal journey through the markets so don’t reach for the unattainable. Keep things simple and do them well, within tolerable limits. It will improve your trading.
Don’t buy ‘systems’
Doing this for a living is rare, doing it on a massive scale for years, even rarer. But there is always an active market for people who sell systems for a living.
Imagine your journey through the markets like travelling into the Californian mountains during the gold rush. You know the Gold is there, but you are not sure where. However, they are loads of map sellers who also don’t know. But they will sell you a map anyhow.
For that reason, 99.99% of the stuff you can buy will be completely useless. It’s a competitive market as well, so people will outdo each other to promise much, but deliver little.
So invest that money in exploring the market yourself and don’t waste it on something that only exists to extract money from you. Post on the forum for views on systems and processes and you will get an honest answer. Somebody has probably got a copy or has seen its contents and can comment on it for you. Don’t look at ‘review’ sites. They are generally there to get you to buy. Avoid ‘reviews’ that don’t use a direct link as it is probably affiliated.
Winning isn’t profiting
This is something that always catches people out.
If you tell me you want to win 99% of the time I can show you a number of ‘systems’ that do exactly that. If you tell me you want to avoid something that only wins 5% of the time, it’s possible that you may be turning down a winning system.
The rate at which you win does not dictate your profitability. It’s your expectancy.
How much you win, how often and how much you lose and how often determines long term profitability. With a high strike rate strategy you can frequently but still lose in the long term if your loss is too big or comes in too often. It’s perfectly possible to create really impressive daily P&L’s, or even over the week. But over a month it’s much harder as the full range of outcomes reverts to mean.
Focus on trading profitability, not just winning.
Don’t set specific targets
Each week I expect to get something, but I never know how much. I don’t care and that’s the perfect way to look at things, with a long term lens.
I know what would be a good week and a bad one, but I don’t specifically target it in a narrow fashion. That means I don’t end up chasing it and I focus purely on what is in front of me, good or bad. I’ll often avoid the bad completely because of that.
I don’t look at my P&L during the day, I just trade as best I can on each market. I know if I do that it will all balance out in the long term. If you focus on your individual results you will find it tends to influence your next trade. From a psychological viewpoint, that’s a disaster. So don’t do it.
It’s all about the long haul, not the next trade. So don’t cave into the emotional rollercoaster that this brings. Just chip away and do your best with what is in front of you and you will do fine in the long term.