Have you ever felt frustrated with your own trading performance? How many times have you changed your trading strategies only to find out that this didn’t work? You might be doing everything right, but what if something was holding you back?
You’re not alone. Many traders don’t quite know how to reach their full potential.
A variety of factors could be holding you back from trading success, including how you view the markets and your trading psychology.
This blog will walk you through the top five game changers and what you can do to transform your trading performance.
Game Changers to Accelerate Your Trading Performance
Having an edge over other traders gives you a better chance of success in your trading career, but finding this edge can be difficult. Some traders spend thousands of dollars on seminars and other expensive training programs that don’t necessarily provide them with the strategies they need to succeed.
But what if there were some affordable game changers that could help you improve your trading performance?
Well, good news is, THERE ARE!
If you’re looking to take your trading performance to the next level, these five key game changers are just what you need.
Game Changer #1: Market Analysis
Traders should always trade according to the overall market conditions. The chances of success is much higher when traders trade in-line with the overall market trend. That means going long in a bullish market and short in a bearish market. This makes trading safer, which means less stress and greater success to the trader.
At WiseTraders, we use the OVI Market Timers, the OVI Sentiment Indicator, and the OVI Dashboard in addition to analyzing the 4 main indices: SPY, DIA, QQQ, IWM for our market analysis. We trade only when the markets are safe and trending and scale back when markets are choppy.
Some traders also have a personal rule of when to stay on the sidelines. For me, that occurs when I encounter 3 consecutive losses. Based on my personal experience, these losses are an indication that market trends have changed or that I’m breaking the rules.
Hence, I use them as my own warning signal. It prompts me to stop trading because I’ll then need to identify the main cause behind my losses here. If the main cause is due to a change in the overall market trend, then I’ll have to wait until the market conditions improve before I start trading again. If the main cause is due to me breaking the rules, then I’ll need to get my discipline back on track by paper trading.
Game Changer #2: Trade Specialization
The best traders are those who specialize and have strategies that they stick to. Trade specialization will not only make traders more profitable, it’ll also allow traders to focus and build their skills quicker. This makes it so much easier to improve your trading performance. Remember – just like life – the stock market always rewards a specialist.
For me, I take a specialist approach to my stock picks and trade setups – I only trade stocks that I am very familiar with or setups that are exhibiting at least 3 of the 4 Big Money Footprints.
At WiseTraders, we have two main strategies: Trend Continuations and Pullback Reversals. The Trend Continuations strategy consists of the consolidations, bull flag, and bear flag setups whereas the Pullback Reversals strategy consists of the dojis, railroad tracks, and pullback consolidation setups.
I personally gravitate to the pullback consolidation setup. This has been the setup that produced most of my winning trades.
Game Changer #3: Trading Plan
The trading plan is one of the most important components in trading. It is key towards building a trader’s discipline. If you’re serious in having more consistent trading results, commit to your plan. Look at it every day and reflect on your progress, writing down what has worked and what hasn’t.
A trader’s trading plan does not have to be set in stone. Instead, traders should adopt a dynamic trading plan that is continuously updated according to their level of experience.
I personally have a trading plan that changes according to market conditions. I adopt a defensive trading plan when markets are overbought and a slightly more aggressive plan when markets are oversold.
With a defensive trading plan, my focus is solely on defending my profits. That means taking 100% profits when my profit target (P1) gets hit. I also tend to reduce the number of trades I make with a defensive plan because I do not want all my positions to get stopped out when the markets reverse.
On the contrary, a slightly more aggressive trading plan allows me to ride on a windfall profit (P2) and take slightly more trades.
Game Changer #4: Trade Journaling
Trade journaling is another component that ties in with the trading plan. Keeping a trading journal is all about creating accountability, which in turn leads to better performance. Traders should set aside time every day to record what happened in each and every trade.
A good trade journal should contain information on a trader’s wins and losses, mistakes and successes. Traders should utilize these information by reflecting on what they can do better moving forward. This is key towards improving trading performance.
My own personal trading journal is very short and simple. Keeping it short saves me time when I am reviewing my trades. For me, I only need these 5 key information in my trade journal: Trade Entry Date, Stock Ticker, Profit Target (P1), Stop Loss (SL), and Observations.
I place huge emphasis on my personal observations in my journal because this is where I’ll find important insight on all of my trades. This is where I’ll identify the type of trading mistakes I made, any bad trading habits or specific strategies that may contribute to improved overall performance.
Game Changer #5: Trading Psychology
The four game changers listed above essentially lead to trading psychology. This is one of the most critical aspects to achieving trading success. Most new traders mistakenly believe that all they need to do is to find a great trading strategy or develop the skill to time the markets correctly. Once they do, they can just sit back and the market will just start pumping money into their account.
Unfortunately, trading is not all about finding that one great strategy or timing the markets. While it’s true that you’ll need an edge to succeed and become a profitable trader, the methodology and market timing only accounts for some of a trader’s success. The real secret to trading success is to have the right psychology. The best trading system or strategy will still fail if you don’t have a winning trader’s mindset.
Therefore, it’s important that traders learn how to control their emotions when trading. This will lead to a more rational market analysis which will then lead to an objective trading strategy, trading plan, trading journal and ultimately good trading psychology.
