Trading Is Easier When You Find Your Rhythm

Posted in: Basic Trading Strategies, Trading Article

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You need for find your form in your trading business and it is not always an easy thing to do.  Having a rhythm to your approach, feeling like you are in “the flow”, can be one of the most useful things for a trader to learn how to do.

It’s not always easy.

There are three reasons why finding flow, finding your rhythm in trading can be a tough thing to do.

 

You’re not confident in your understanding of the market, preparation or strategy

It can be hard to blindly follow a procedure if you’re not certain it’s the right way to do things.  Anybody who has tried to assemble something from Ikea may relate to that.

The trouble is with this is that at some point everyone starts off without really knowing if what they are doing is the right thing.

Yes, everybody starts on the same step in their quest to move forward.

The thing to realize is that the process and routine is important so whether or not individual aspects are especially useful or not, is a different matter.

If there are certain things you do which aren’t very helpful to your trading performance, they’ll be more obvious if the process is a consistent one. It’s important to create a plan based on the things you ‘know’ are helpful.

Look at the simple example of checking the economic releases for the day. This is easy to do and definite. If you lose money because you haven’t seen that the US jobs report is due then that’s a problem.

  • Define what you will check for technically in the markets.
  • Define which behavior in the market you want to try to capitalize on
  • Create simple, easy to follow rules for identifying and trading it

 

Your trading plan is not very clear

This often follows on from the first point where if you’re not confident in your understanding, you could be reluctant to be specific in your plan.

But then it could lead to the problem of not understanding what exactly you should be doing. So the routine could vary significantly from day to day and therefore making it difficult to establish a pattern.

If your plan isn’t clear then:

  • You will miss things in your preparation
  • You will trade off your emotions instead of a clear strategy
  • You will make excuses for why don’t need to review your trades for the day.

But more importantly, these things won’t be consistent. It’ll be one thing one day and another thing the next.

This makes working out what’s good or bad about your trading like a game of “pin the tail on the donkey”. Not straightforward at all.

A clear and concise trading plan is vital and here are 3 key reasons your trading plan must be clear with everything you do:

  1. Trading emotions and trying to figure out the market when you are actually trading is a lot more difficult than defining what constitutes a trade setup and then executing when all the variables line up.
  2. A trade plan will make it much easier to define your level of risk for a particular trade
  3. You will always have a baseline in which to judge your trading performance and improve your trading results.  When you record and learn about your trades, you can add or subtract different variables and measure the impact on the system you are trading.

 

You’re only accountable to yourself

If you’re only accountable to yourself it can be easy to find an excuse for not doing the work or not address issues as they arise.

Our whole lives are about structure and order.

Getting an education, going to work, social expectations and even the fashion of the clothes we wear have an order to follow in one way or another.  We thrive on it and we build upon it.

The structure is created by others though and in one way or another we’re usually answerable to someone else.

But what if you had to define the structure and order of everything in your life yourself? Could you do it and then would you follow it?

Trading is a lot like this. Being able to create a routine is one thing but being able to follow it is another. When you’re only accountable to yourself, having the resolve to push through even when times are tough can be difficult.

There is a reason why personal trading is a $10 billion industry – people do better when they are accountable to someone else.

Proof?

The American Society of Training and Development (ASTD) did a study on accountability and found that you have a 65% of completing a goal if you commit to someone. And if you have a specific accountability appointment with a person you’ve committed, you will increase your chance of success by up to 95%.

 

What is Rhythm In Trading?

Rhythm in trading is not about the price action of the market but the manner in which you go about your day.

  • The way you prepare before trading.
  • The way you trade
  • The way you record your trades after you finish for the day

Basically everything you do (or should do) in relation to trading. Once you find your rhythm everything happens seamlessly – it feels effortless.

  • You know what you need to do
  • You know when you need to do it
  • You do it automatically
  • You’re less frequently rushed and rarely forget to do anything

Finding your rhythm can almost make you feel like you are trading on autopilot with all the safeguards being accounted for.

 

Finding Your Rhythm Is Challenging – But Essential

To find your rhythm is really important but can be challenging at first and for very understandable reasons.  It’s not easy and anybody who’s ever started a workout routine knows that it takes a while to get into the flow….finding your form…..before you are comfortable in your new routine.

Trading is like anything else in that to achieve a degree of competency and achieve good results, you need to really get into it and “find your form”.

Planning out exactly how to go about your trading is such an important step to finding your rhythm. A clear and well defined structure will help you to know what you should be doing. Sticking to it might seem difficult to begin with but it does get easier.

  • You will see more clearly if and where you are going wrong
  • You’ll be able to make changes to improve your trading plan
  • You will be able to objectively judge any improvements you may make

Once you find some success and you’re automatically repeating things in your routine, you can get on a roll which will help lead you to consistent profitability. So do what you can  to establish a structured well thought out routine, then after a while you might just find your trading rhythm.

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