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. Learning by doing doesn’t really exist in trading and executing trades alone or randomly flipping through timeframes and staring at charts all day long will not make a difference either.
There are a few very specific things that can help traders improve their skills rapidly and very targeted.
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 the only way you can see what works for you—and keep your stress levels to a minimum
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
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.
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 a profit from it. Build your skill base in practice sessions, so you’re not learning the hard lessons when real money is on the line
Discipline in trading encompasses a variety of different aspects. First, you have to be disciplined to follow your rules. Premature and impulsive decisions where a trader violates his trading rules are a very big performance killer. Second, you need the discipline to regularly write a trading plan for the upcoming trading days and be disciplined enough to journal all your trades afterward
What does your trading day look like? Do you randomly flip through timeframes and various instruments, hunt for entry signals while watching TV, browsing the web and chatting with other people? Trading is a high-performance activity and you cannot expect to outperform the market while treating trading as just a hobby. While trading, do nothing else! Focus exclusively on your charts and your routine.
Take A Few Minutes and Prepare for Each Day
Each day take one minute before you trade to make sure you are feeling clear-headed, focused and present. Also take a couple of 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
Record Every Trade You Make
Together with a trading plan, a trading journal is the #1 tool when it comes to developing trading skills. If you do not track what you have done, it is impossible to know what to change to become better. Keeping a trading journal requires effort and discipline, but this is what developing skills and practice is all about
Monitor and review every trade you make. A 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.
Becoming a profitable trader is not an accidental product – it requires time, effort and obeying certain principles. 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.