There’s always been a lot of talk in trading circles about needing screen time to become ultimately successful.
I’ve always questioned this logic.
You could sit in front of a screen like a zombie for 1000 years and still not become a great trader. So if not screen time, what’s needed to become a ‘seasoned’ trader?
Deliberate practice of appropriate actions and responses to repetitive market behavior. From analysis to the specific actions taken during and after a trade.
Repetition Builds Habits – Good Or Bad
Not only does the practice of a task/skill/behavioral response create stronger pathways within the brain it also decreases neural activity each time it is repeated.
When you do the same thing a lot, you become better at it and you end up almost automatically responding to the same or similar circumstances without even really thinking about it. Now that’s a powerful thing to leverage in your trading.
Sometimes it’s some of the most basic human adaptations which we often take for granted, which can act as great allies in the goals which we’re trying to achieve.
Yet without some thought, this human capacity to become ‘automatic’ can be the very thing that holds us back.
As much as it’d be a wonderful thing if it could distinguish between good and bad, as far as the brain is concerned when it comes to action become engrained there is no such thing as a ‘good’ or ‘bad’ habit.
There are just situations, responses, and actions.
Doing the wrong thing over and over again will ensure that you’ll become really very ‘good’ at doing it wrong. Not only could it become second nature to you, but it could also become a difficult pattern to break.
It’s The Right Things That Matter
Practicing the ‘right’ things as a trader is important. But let’s just say you don’t know what the right things are, then what do you do?
The first thing a new trader looks to is education. Either from books, courses, forums or anywhere else for that matter. Knowing if the education provided is good is something you will need to address before you start practicing any methods. This is the key.
As you become progressively more competent, you’ll be better placed to understand what good practice for specific circumstances is. For example, setting your risk parameters before you enter a trade and sticking to your stop loss are vitally important.
At first, it’s something which you might find difficult. But over time it should become natural.
I’ve Built Bad Habits. Now What?
The obvious question is what if you’ve already identified that you have picked up bad habits or incorrect approaches?
The first step to correcting a problem is identifying it. Then you need to correct it somehow and retrain your brain.
Using the example of a stop loss, how would you approach not being able to stick to it? The first thing I would do is isolate the specific action as much as possible. This means defining quick, easy and plentiful entry points. Maybe by using something you don’t normally do such as decide on entry.
If you use levels, try a simple moving average perhaps. The entry almost doesn’t matter. The profit target doesn’t either. So you could say exit after x minutes or x points or whichever comes soonest.
The second step is that you need to spend some time focusing purely on sticking to the stop. At this point, I would suggest this is an exercise for simulated trading only!
As an additional exercise, you might try making your stop unreasonably small and then later, unreasonably large. By exaggerating for a period, you’ll have a better chance of settling on the middle, or somewhere around what you originally set as a stop and you’ll be more likely to take your stops. This technique can be used for different aspects of your trading if you take the time to think about how to apply it.
Keep Doing The Right Things & Become Great
In the end, what trading simply boils down to is if you do the right things for long enough there’s a good chance that you’ll get good at them and hopefully be a profitable trader because of it.
When talking about “right things”, where do you start?
The team at Netpics has put together a free guide on using price patterns in your trading. These are not patterns like head and shoulders – these are even easier to spot. You can download your price pattern guide by clicking here.
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