3 Keys to Day Trading Success; Change your FUTURE with this strategy!
7 killer tips that will change your trading for the better INSTANTLY
#No. 1 Daily loss limits
This special tip made a big difference in my own Forex Trading trading. In the early days, I often had a few good days or weeks when i made profit and then wiped out all my previous profits in just a siugle session and sometimes even with just one trade. Does that ring a bell for you?
Today, I have set a daily loss limit and when I’m down 2R, which means having two consecutive losses, I’m done. It does not matter what happened. I just stooped. Initially, it was extremely difficult to follow this rule and often was tempted to go for the third trade when I saw a potential entry, and I did many times. Today, when I’m down with two trades, I immediately turn off my platform. I do not look at other tables, leave Twitter and I do not talk to other traders in Skype.
I return to my quote a few hours later, but not to trade! To update my journal about my past trades, Summary what I did and try to find weaknesses in my game. It had a big impact on my business and my sanity and I highly recommend it.
#No. 2 Don’t use weekly monetary or trade count goals- It’s difficult to maintain initially
Daily, weekly and monthly performance goals should be avoided. They create a sense of urgency and a need to trade. I have yet to see a Forex trader who has a weekly goal of performance and profitable in the long term.
One of the most dangerous thoughts is “just need a winner to finish my positive week.” Been there, done that. It never works. What happens is that your reasons to trade in fish and end up thinking yourself in bad trades and spending the weekend in bad mood.
Instead, goals-cards should be as focusing on: I’ll diary of all my trades at the end of the day; I print my images, annotate and fold them away. Check my checklist before every trade I take; No, I will not broaden my stop on my trades. I will remain very strict in my trading plan and will try to follow my own set trading guidelines. Test it!
#No. 3 Three sources of errors and emotional downward spiral- Avoid them.
I receive about 10 to 15 emails daily (and thank you very much for so much support!), but I see recurring themes that arise in most of the emails. You can boil down the reasons why people struggle in trade to these three areas:
(1) Large egos
This usually leads to increased risk, violation of rules of stop loss, not wanting to make mistakes and trade without rules because they think “you know what will happen” or because you think you are a great trader.
(2) High expectations
This is essentially a matter of size account and your relationship with money. If your account is too small, you need to take a lot of trades or risk too to achieve a given performance. Traders who think in terms of $$ and if their accounts that are too small will see a big difference between their expectations and reality and that is causing frustration and demotivating. Expect based on reality, by not your gut feelings.
(3) Poor work ethic
I do not want to call out, but it’s such a common thread I see every day. Not having a magazine, not writing business plans and not do any work of self-improvement or personal development that will keep you growing.
# 4 Recognize you progress?
If you do not recognize that they are making progress, you will stop doing what you’re doing and go back to the old misbehavior
I read this quote somewhere (unfortunately I forgot the source) and is 100% true in trading. People want to succeed now and they want it much more and even again and again. However, only see the end result and and do the things that move them to get it. Little progress is not very exciting for most and is especially daunting if you are aware of how far it still has to go.
Being a mountain biker, I know this very well; just focus on the next few hundred meters and keep pedaling. Do not look at the top of the mountain and imagine how long and how painful it is probably going to be. You probably see many great things in your way and there may be something beautiful and unexpected waiting behind the next lap – just keep pedaling around at once. So, trade to trade well. That’s the lesson for you.
#No. 5 Beliefs are hypotheses to be tested, not the treasures to be guarded.
This is another great quote that I found recently. I picked it up in the book Super prediction which I also recommend. Linked to the previous point about egos. No one likes to be wrong and see his stop just hits, but it will happen. Should start to see your trading as hypothesis you put on your charts and let price test them.
#No. 6 Gut feelings exists, but it is not what you think it is
I usually know what I’ll do after 10 seconds, the rest is double checking. – Magnus Carlsen
Magnus Carlsen is currently the chess player ranked # 1 in the world and this quote stuck with me. Often you will see flitting on the board for a very long time before they make a move chess players. Quote Carlsen provides a unique insight into his thinking and also applies to trade and the concept of gut feeling.
How often you saw a trading chart and thought you”knew” what was going to happen next? The amateur trader follows his “gut feeling” that is just pure guessing when it is not backed by years of experience, while the pro recognizes his gut feeling but then again steps back from his charts to think it through.
Before making any trading decision, especially if you are acting on your gut feeling, take your finger off the mouse and reassess the situation. Take your checklist, check with your trading plan, go to the longest period of time, compare the correlated markets and check news of upcoming events.
#No. 7 Fear comes from uncertainty
I want to close with a quote from the book “A mental game of poker” by Jared Tendler that 100% applies to trade and I’m sure many of you can relate to this:
The ultimate goal is not to eliminate uncertainty; It is to correct the underlying defects in its logic that forces you to be certain when you do not have yet. Without uncertainty, there is no risk. . Without risk, there is nothing to win in poker, no edge to create and no profit to be realized.