3 Simple Keys to Winning Trading
09/20/2011 3:30 pm EST
Leslie Jouflas explains that having a proper trading plan, being focused, and evaluating results comprise a three-step program for trading effectively while at the same time blocking distractions and information overload.
Why it is so important for a trader to be focused? Let’s ask Leslie Jouflas. Leslie, why is focus so important?
Focus is in an essential key to trading successfully, I believe. The process that most traders come into is they gather a lot of information. You need information, you need education in trading, but what traders tend to do that might be a mistake is they tend to think if they’re not consistent in their trading, they need more information.
See related: How to Achieve Consistency Faster
So they go out and gather more and more and more and more. But probably, at a certain point for most traders in their toolbox of information are enough pieces to start really focusing in and starting to put together a solid trading plan.
The trading plan is the first focus item that a trader should have.
So if traders are sort of confused as to what they should be doing, how they should be entering trades, how they should be placing stop losses and taking profits, if those three areas are an issue (or any one of them), the trader probably doesn’t have enough focus and should consider sitting down and writing out a basic trading plan that’s going to focus them on the actions that they need to take in their trading.
From there, they can evaluate the outcome from a very simple plan and then take steps from there.
NEXT: Learn to Drown Out Distractions and Perfect Your Strategy|pagebreak|
During the trading day or any time traders are looking at the markets, there are all sorts of distractions. How do you tune out the distractions?
Well, distractions are part of everyday life. You can hardly go anywhere or do anything without some sort of distraction.
So traders will do best if they do the preparation of their focus, of their trading plans, of what they’re going to trade, before the markets ever open. That’s going to be a huge help to them.
If they’re finding they’re distracted during the trading day, like maybe telephone calls or maybe people, family or friends interrupting, they have to make it known that their job is between these hours and during those hours, even though it may look like they’re not doing anything, they need to make it clear that their focus is on their job of trading.
Are there any shortcuts we can take to put focus at the top of our list?
I think the best shortcut is to look at the information that the trader already has. Then find what really interests them, go right to that, and develop that simple trading plan and start from there.
It’s as easy as that?
Well, it’s a start.
Once you get the plan, what the next step?
Once you get the plan, then you can start executing it. I always suggest that that’s done in a simulator and not with live funds so that the trader can start to learn how their actions are impacting their results.
That’s an extremely important step, and it does take focus to do that.
The focus in that area comes from the trader having willingness to be accountable for tracking their trades, for paying attention to what they’re doing, and to look at the outcome and identify where the strong points are and the weak points that need to be worked on.