In a previous post “how to make great trading resolutions” I posed a few questions to ask yourself, but the questions you should ask and the resulting answers that need to be worked on will greatly depend on how far along the trading journey you are. You may find that there is nothing wrong with your trading at all, but in fact all your problems lay with you. Breaking perfectly good rules, taking trades you know you shouldn't, or not doing proper analysis to prepare yourself when you know you should. One tip for this kind of behaviour is to set yourself a forfeit, it’s a great way to programme your mind not to do it in the future.
Here at MMC™ we get asked a lot about our own trading journeys and at what point we as traders ‘succeeded’, and while it’s a very personal journey and won’t be the same for everyone it may help you in your journey to hear how I progressed. When I first started trading over 10 years ago I was fortunate that I didn’t suffer greatly from self-sabotage or indiscipline, whatever I learned or was told, I followed. One thing I would always do however is question it. I had no problem following rules but there needed to be a good reason for the rule and if that reason made sense to me then I would continue with it.
I will always ask myself ‘why’ and you should to. Why this rule or why that rule, why this market or why that market etc. My first major ‘why’ was ‘why should I trade this market’? For a couple of years I followed my rules and took trades because they met my entry rules based on what I saw on the chart. My account grew, but slowly, largely due to losing trades that I couldn’t explain, this didn’t sit well with me as a ‘why’ person. To be comfortable with my rules I wanted to know why a market was moving the way it was. This ‘why’ was answered when I discovered the Commitments of Traders’ report. I could finally see that a market would go up because it was being bought and down if it was being sold or reverse if that market ran out of either buyers or sellers.
It was at this point I became comfortable with my trading. I was always happy with my rules and now I had a reason to apply them to the markets I could see where being bought or sold. Other answers to this question have since come in the form of seasonal data and the
Currency strength matrix. All utilised so I could have 100% confidence in what I do.
To succeed at trading you must be comfortable with what you do and how you do it. My discomfort came from not having a reason to trade so I found a reason and removed the discomfort. See if you can do the same.