There are a lot of things you could do to make yourself into the trader you want to be. And it’s all about creating the right behaviors, the right skills, the right habits. What we’ll talk about here are habits that you need to get into to become a consistently profitable trader.
This is perhaps your number one habit you need to get into and cultivate, because everything you do in terms of trade mechanics will revolve around this…and that’s journaling all your trades. There are two ways to do that, one is simply to communicate that a trade was made, and the barebones facts, the other is comprehensive…that’s called the Playbook.
Playbook – make entries into your Playbook when you discover a setup that’s triggered your entry criteria from one of your standard setups and it’s significant in some respect and needs to be more than just journaled for later study, or maybe it’s a new opportunity, a new setup to you, that has great potential for becoming one of your goto trades. You need to start an archive for that trade so you can track it and examine it.
What does your playbook look like, what does it contain, what software should you use? The software you use is completely up to you, but here are some suggestions…use a software that makes it easy to add text and graphics, like chart screen shots, along with annotations. Also, that software should make it super simple to share your ideas or present them to others. I use Keynote, others might choose Powerpoint or even a word processor. I share them usually as a PDF.
So, Playbooks should be worked on daily, you need to archive and reverse engineer the trades that are most meaningful to you.
The Playbook entry should contain a title, date, what led up to the trade, the market environment the signal, what the strategy was, the intraday fundamentals and technicals. What did the order flow look like, how was the trade managed, and a retrospective, how could you have traded this better, or what new ideas might be garnered from it…perhaps this setup pivots into a completely new setup.
Another related habit is to journal all your trades…with the help of your platform this should be a relatively easy task. You can go the extra step and use a journaling software or web app like TraderVue (https://tradervue.com). This memorializes your trade and you can use the data to create trade stats.
Record Key Moments in Your Trades
We are not very good at recalling exactly how anything went with anything we experience in the near past, even just a few minutes ago, never mind hours or days. That’s why in courts, eye-witness accounts are considered the least reliable. Best is a recording, it’s no different with your trading.
So, get into the habit of recording key moments in your trade setups. Make sure you have good screen recording software that makes it easy to select a portion of your screen and record it. I use tools that came with Parallels virtual machine called Parallels Toolbox, it has everything I need to take snapshots, or screen capture audio & video of screen areas, windows or the entire monitor. It even lets me download YouTube videos.
I’m only familiar with the Mac, and there are some rudimentary tools for capturing areas on the screen using ScreenShot, and screen recordings using Quicktime. However there are tons of great, I would go to the AppStore and search for the term Screen Capture. Many free choices and many high quality, low cost, paid choices.
Google something like “Best screen recorders for Mac/windows”
Once you have something, make it a habit to record what you think makes sense. This will go into your Playbook, your Journal and possibly into YouTube videos or other places where you can share your ideas.
Okay, so lets recap so far…the three top habits I’m suggesting all revolve around memorializing your trades. Think about that.
Previous Posts on Habits
In a previous post I suggested ways you could prepare for your trading day, and in there I talk about how important it is to prepare and all the things you need to do to put yourself in the right state of mind, be in the right physical shape, make sure you have all the information you need, that you are tee’d up and ready for the highest probability setups, etc.
And in that post I have a worksheet you can use and modify, that helps you keep track of all these things so you can turn each element into a positive habit. And in another post, these links will be in the description of this vide…in another post I talk about a specific way to create habits that stick, a very scientific researched way to make sure you engrain or imprint habits into your mind and soul.
Alright, lets move on to the next habit you should be working on in your quest to becoming an elite, consistently profitable trader.
You’ve heard so many people say that trading is all about controlling your emotions, that strategy and edge are all important, but without control of your emotions, without the ability to approach situations with confidence, you don’t stand a chance. To a degree I agree with this notion, but I would say that it’s much more than simply controlling your emotions, it’s more about controlling your mind.
There are things that we can do, physically, that will put us in the optimum position to control our minds, things like getting good sleep, being well hydrated, eating healthy, maintaining a strong body that’s resilient to external stresses. All of these things create an environment where our minds can focus more readily, and in some ways, things like exercise, actually help us train our minds in a positive way.
There are things, aside from the physical stuff, that we can do that directly affect our minds, train the mind to be more aware, improve our ability to focus, be more resilient to stress, become more creative. And then there are mind hacks, or techniques we can use to improve our ability to put things in our long-term memory, and recall things instantly, or do relatively complex math, with large sets of variables.
All of these things will improve our ability to trade. So, where do we start?
Well, I don’t want to get all weird and talk about anything that doesn’t have scientific backing, so I’m going to point to a few things that have shown through thousands of studies that actually work, and suggest a particular method that encompasses both physical and mental aspects. That method is called the Wim Hof Method. I’ll place a video below of a great synopsis and evaluation of this method.
Things that work include meditation, deep breathing, intermittent fasting, and regular physical exercise, like yoga. You want to make more money, right? Then let’s get fit.
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