The Ultimate Guide To Creating A Professional Trading Routine
Most traders have very similar problems and go through the same struggles and most of the time, the traders focus on the wrong things and waste a lot of time. Professional trading and becoming a better trader has little to do with the indicators you choose, the settings you apply to them, or the patterns you follow, but when we take a look at struggling traders, the same patterns often become obvious immediately.
- The trader lacks structure and he is all over the place without knowing what to look for specifically
- The rules for his system are not mapped out in detail or he does not have rules completely
- He still changes his approach regularly, hoping to somehow stumble over something that “just works”
- He does not spend enough time planning, analyzing and reviewing trades
If this sounds familiar, great!
This article will be the perfect place to start a better trading future. We have compiled the most common issues and how to fix them:
The 3 horsemen of trading
#1 Repeating the same patterns and mistakes all the time
When we boil it down, traders keep repeating the same mistakes over and over again.
It is rare that a trader does everything completely wrong and there are usually just 2-3 things that a trader needs to change in order to achieve much better trading results. Mostly, traders haven’t developed a good foundation and they too often get caught up into the nitty gritty without really understanding the basics and looking for the most impactful issues in their trading.
If you can’t stick to your rules, still jump around timeframes, chase price and revenge trade, looking for a new indicator or fine-tuning your exit methodology is not helpful. Work on the basics and the BIG tasks at hand first and you will see a huge jump in performance.
In the trader development program, we have set the Tiltmeter challenge at the very start because once a trader masters his discipline, he will see an immediate shift in his overall trading. Once this is accomplished, we move on to more advanced concepts such as trade optimization, order improvement, risk manegement and trade management tweaks.
#2 Not being able to quantify the impacts of their mistakes
Just by showing traders how much money they are losing and by making them aware of their expensive mistakes, many traders will change their behavior much faster.
A trader without a routine or a trading journal does not even know what is keeping him from success. We recently reviewed a journal from one of our Edgewonk users and although he was profitable overall, his trading had periods of big drawdowns. We were able to quickly identify the outliers and the reasons why and when he lost too much money. He did most of the things correctly but 2 or 3 areas in his trading were responsible for the majority of losses. Luckily, he has been using the trading journal and his negative patterns were easily identifiable.
A trader without a journal would be left wondering what went wrong and then probably draw the wrong conclusions.
#3 Lack of structure
Most traders just fire up their trading platform in the morning, flip through timeframes and markets, and then start hunting for signals. However, they don’t really know what they are looking for and many traders spend all day glued to the charts, chasing price and reacting impuslively to price moves.
Obviously, this is not how a professional and structured trader approaches his trading. This then leads to chasing trades, missing trading opportunities and revenge trading because of frustration.
Especially if you are not a full-time trader and you are busy with your job, your daily life, family and other obligations, it is important that you have a good schedule and that trading time is used effectively.
In the Edgewonk trader development program we help you establish a routine step by step and we provide tips on how to schedule time for your trading, planning, reviewing and trader development tasks.
Trade with confidence
A trader who knows what is working for him, what isn’t and who knows how to manage his time and how to approach his trading, can trade with much more confidence.
Confidence is important for various reasons and you have to trust in your abilities, skills and your trading method to make the best trading decisions. A routine holds it all together.