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5 Tips for Improving Trading Performance
04/07/2014 6:00 am EST
If you expect to perform your best in trading, you always have to be at your best, says Erich Senft of the Indicator Warehouse.
Last week I tried to trade after a visit to the dentist. As you might guess I had less than desirable results. The experience reminded me about an important concept often overlooked by traders: if you're going to trade your best you have to be at your best. Simply put this means that you have to "have your head in the game," or put another way, you cannot trade well if you are not 100% focused on your trading.
It seems simple enough yet we often push ourselves to trade even though we're not in our best frame of mind to perform. Remember that trading is not like other businesses. If you are not at your best, the market will not have mercy on you, and that could make for an expensive day. Your success or failure depends in large part on your ability to focus and handle the pressures associated with trading.
Here are a couple of suggestions to improve your trading performance that I learned the hard way.
Get Your Rest
Sometimes performing your best is as simple as getting a good night's sleep. This is a big one for me. Being on the West Coast, the markets open at 6:30 am Pacific. It's easy to get caught staying up late watching TV only to have to drag your butt out of bed in time to make the market open. My best trading days are the ones where I get to bed at a decent hour.
Get Your Life In Order
A trading friend of mine was going through a rough patch in his marriage. He tried to keep trading during this time even though his life was turned upside-down. Needless to say he didn't do very well. If you're experiencing a period of personal strife, or illness, or you're in pain (i.e. dentist visit) take a break from trading. Your account will thank you.
New traders, especially, are in a rush to make their fortunes on the trading floor. While there are still the overnight success stories, they are very rare. What is less rare is the number of traders who blow up their accounts because of their aggressiveness. Take your time to learn your craft. Trading is like anything else in life: you have to practice to get good at it. Don't rush.
Take a Break
Some of my best trading has been after a vacation. There's nothing like getting away from the day-to-day grind to clear your head. Trading is not as demanding on your schedule as a normal job but it can still take a toll. Taking a week off now and again (or even a long weekend away from the computer) can work marvels for your mind and spirit. And when you come back you'll be surprised at how much clearer you're seeing things.
Don't Beat Yourself Up
Unless you have a system that performs 100% of the time, you will have losing trades. Sorry if I burst a bubble but my point is this: don't beat yourself up if you've had a losing trade(s). I see a lot of traders who lose their focus just because the market hands them a losing trade. Losing trades are a part of trading. The important thing is to never lose more than you can afford. That's where money management comes in. If you're employing correct money management, you don't need lose your composure just because the market hands you a loser.
These are just a few suggestions to help you bring your A game to your trading. The important thing to remember is that if you're going to perform your best you have to be your best. The market will accept nothing less.
By Erich Senft of Indicator Warehouse
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