By the time you are reading this article, you are probably getting your affairs in order for the upcoming holiday season and looking forward to some quality time this Christmas and New Year with the family and good friends. As always at this time in the calendar, I like to unwind too and relax as best as I can with those people closest to me, fully enjoying this special time. I have also found over the years that I seem to get one or two “quiet” spots during this time to take a little look over trading and review the plan and business in general. Typically markets can get a little quieter during this period, so this is an ideal time to take that bit of time out each year for an all-round check of the trade plan and best practices. It is something I have done for years in a row now and has become somewhat of a ritual over the holidays for me!
As it stands, there is usually very little in the way of changes which need to be made as I have been using the same techniques and methods for a long time now, but this does not mean that I am still not checking any ways to become more efficient in my day to day trading endeavours either. If anything, I would say that the whole Christmas review process becomes more of reinforcing of my rules and a solid way to make sure I am sticking to the rules each and every time. Let’s face it, we can all take our eye off the ball from time to time and get stuck in complacency mode now and then if we are not careful. It was when I was looking at my journal the other day and planning which afternoon I would spend looking over my plan this holiday, when I got a thought that this would be a good topic to share with my readers.
If you have not yet taken the time to regularly review your own trade plan, I would suggest that there is really not a better time to do it than around now when you are about to head into a New Year.
Start fresh with a clear mind and attitude to move forward with and check that you are doing all the things which you intended to do when you first put that all important trade plan together.
To help you along the way, I would like to share with you three key areas which you should be ensuring that you are including in your trades if you are not doing so already:
This characteristic is vital to any trader who wishes to wait for the very best setups that the markets have to offer. Only by waiting to enter the market with the correct timing, will you ever hope to achieve the very best risk to reward ratios and probabilities for success. The market has to come to you and if it doesn’t, then let it go without you. There will always be another trade if you have the patience to wait and not chase.
Next up we have discipline. Do you know the rules which you should be following but never follow? Do you stick to your risk management rules when the trade does not work out? Do you only take trades which meet the exact requirements of your trade plan? If the answer is no to one or more of the above, then you need to ask why. The market can never be controlled, so you need to have the ability to control yourself and that only comes for developing your discipline, plain and simple.
Probably the area in which most traders tend to struggle the most is consistency. The main reason this is such a challenge is nothing more than the ongoing need for most of us to be right and avoid losses. You can take a winning strategy and apply it in the market successfully only if you stick to the rules of execution over and over again. The problems tend to arise when we tinker with the rules and execution after a series of small losses because we attempt to make the already working strategy better so as to stop the losses from happening. This also applies to those of us who tend to pass on a good setup which matches our plan, so as to avoid a potential loss from happening. If you don’t take a trade, though, you can never hope to achieve a winner, can you?
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