The Answers To All Your Trading Questions Are Right Here
Doubts, uncertainty and fear are 3 common emotions and states of mind that accompany traders through their trading day and throughout their whole journey. It’s what keeps traders from becoming profitable and it also keeps them trapped in old behavioral patterns, repeating the same cycle and mistakes.
Traders doubt their trading method, the way they manage trades and their own abilities as traders. They are uncertain about how to approach the market, how to manage trades, when to exit trades or how to set a stop loss correctly. And all this uncertainty and continuous doubting lead to fear – the fear that they are doing something wrong or the fear that they are missing out.
A trader who does not have full confidence in his system can’t trade at his best because he always thinks that he could (or even should) be doing something differently. This often leads to making impulsive decisions, micro-managing trades incorrectly or plainly trading emotionally without a plan. Such an approach leads to inconsistent results and many traders make the same mistakes repeatedly, which then reinforces the beliefs that they are doing something wrong and more doubts, questioning and fear enter their mind.
Traders then often reach out to other traders and look for answers to their questions. You will usually see traders ask things such as “how should I move my stop loss”, “when do you take profit”, “which indicator is the best for entries”, “how much money do I need and how much can I make”, “which timeframe is the best” or “is my indicator setting wrong”. I am sure those questions sound familiar and most traders will have them in their heads.
However, you should NEVER EVER ask a different trader about such crucial, personal and strategy-specific questions. First, you have no idea if the other trader answers honestly and correctly, you don’t know his objections and, most importantly, the other trader has no idea how you trade, he does not know your full approach, how you execute your trades and what your struggles are.
By asking the questions above, traders hope to gain clarity and remove the doubts they have. However, when the answers you get are not correct and you start making changes to your trading that result in more losses, you will end up worse off. You artificially created hope and certainty by asking random traders and your hopes then got crushed once you saw that your results didn’t improve your performance.
The good news is that you can answer all your questions yourself. A good trading journal, is built in a way that allows a trader to choose from a variety of variables and metrics to dissect his trading. At the same time, by personalizing and customizing his journal, he can work on his trading very targeted. And finally, by answering your questions yourself through your own verified data, you will not only be able to remove the voices in your head for good, but the answers you receive are also going to be the right ones most likely.
To show you how Edgewonk fits in, we provided a list with the most commonly asked questions and how the Edgewonk trading journal helps you answer them.
- Which is the best timeframe for me?
Answer: Create a Custom Statistic and track the timeframe of your trades. The results will show you exactly which timeframes works best for you.
- Is the indicator helping my trading? Do I need an indicator?
Answer: You can use different setup-tags to analyze your trades. Then, analyze them separately to find the best performing setup.
- Should I move my stop loss to break even?
Answer: You can easily create an Alternative Strategy and test different stop loss methods without much extra work.
- Where should I set my initial stop loss?
Answer: Use the Drawdown and MAE metrics in Edgewonk to analyze how far price moves against you and then optimize stop placement.
- When do I have to take profits?
Answer: You can use the Updraw and MFE statistics to gain insights about your current profit taking and then find answers when to actually exit your trades.
- Which mistake do I make the most and when?
Answer: Tag your trades with the comment function and then pay attention to the Tiltmeter. The Tiltmeter analyzes discipline and your mental game. It shows your worst mistakes.
- Do I mismanage my trades?
Answer: The Trade Management graph shows you exactly if you mismanage trades once you are in them. Simply compare your actual with your potential performance and get the answers you need.
- How much money can I make?
Answer: Use the Edgewonk simulator and analyze the future projections for your current trading strategy. Go through multiple simulations and get a feeling for potential account growth.
- Should I increase my risk and position size?
Answer: Again, go to the Simulator and play around with it. You can change the values for Avg. Winner and Avg Loser – keep the Reward/Risk metric constant – and see how different risk levels impact your account development.
You can see, most questions you have asked yourself can be answered through your journaling practice. Journaling does require some work and time, but in the end, you will find the true answers to all the questions and you will finally be able to cope with doubt, uncertainty and fear more effectively. There is no better way to create confidence in your trading and your abilities than through deliberate journaling and making progress through your own work.
If you don’t want to go this journey alone, take a look at our trader development program where we guide you through the whole process step by step.
If you are never certain about the viability of your edge, you won’t feel too confident about it. To whatever degree you lack confidence, you will experience fear. – Mark Douglas