Trading Saint or Sinner?

One of the most effective ways of improving your trading performance is by noting what you actually do, then compare that with the associated outcome and then stop doing the things that don’t work or the things that are destructive to your equity curve.

To Err is Human…but repeating things that hinder your trading is probably madness and certainly a trading sin! So here are some common trading sins to watch out for in your trading and to try and stop doing…

Common Trading Sins:

  • Being under-capitalised – which means not having enough money in your trading account to be able to manage your risk properly.
  • Not taking responsibility for your own trading actions – Own It!
  • Trading Live before you have a proven / back tested edge.
  • Trading Live without having a proven trading system or strategy.
  • Trading Live without really fully understanding your trading system or strategy.
  • Taking unplanned trades on a whim without doing the planning prep.
  • Risking too much on any one trade.
  • Not using a well place Stop Loss.
  • Moving your Stop Loss when price looks like hitting it.
  • Moving to Break Even too early.
  • Not closing out a losing trade which was caused by one of the above.
  • Blindly using Trade Signals without knowing the strategy and system behind them.
  • Chasing price when you miss your entry.
  • Suffering from Trading FOMO leading to…..
  • Over Trading.
  • Revenge Trading.
  • Not recognising the current market state and trying to force the market to give you profits when it isn’t ready to, just because you have the time to trade.
  • Hoping and Praying the market will turn around when in a losing position.
  • Not having a written strategic Trading Plan.
    • Your Why?
    • Your What?
    • Your When?
    • Your How?
    • Plus more…
  • Not making individual Trade Plans for every trade you take, including Number of Reasons for the trade, acceptable Confirmation Signals, Entry, Stop, Take Profit/Exit Levels, Position Size(s), When Move To Break Even, How Will Manage The Trade. To Trail a Stop or not? etc etc
  • Not understanding the Context (or bigger picture) of your trade as this will impact on your target expectations and time in the trade. Not keeping records of your trades.
  • Only looking at one side of the market when planning a trade.
  • Not being Patient enough to wait for the right set up and confirmation of the trade and not being Disciplined enough to execute your Trade Plan and Strategy to its natural conclusion.
  • Not focusing on your Process of Trading and being more focused on the potential earnings/money! Focus on the process and then the money will take care of itself.
  • Not taking regular breaks when screen watching
  • Not looking after your mental/spiritual/health needs such as regular exercise; sleep; healthy food; hydration; maintaining and nurturing a life outside of trading etc
  • Not keeping a record of your trades.
  • Not keeping a Trading Journal.
  • Not undertaking Post-Trade Analysis
  • Not recognising and highlighting your mistakes/weaknesses
  • Not working on eliminating your weak areas.
  • Not having a trading accountability partner/ coach or mentor.

There are many more Sins that could be listed, but you get the idea, I hope. Now the above is a Negative List, which if we start to recognise our negative behaviours and own our trading actions we can quite quickly eliminate a lot of them and put them in the Sin Bin and turn things into the Positive. If we can do that, then we stand a good chance of starting to see some fruits for our trading labours.

The smart readers will realise that there is a lot of structure required in your trading to eliminate the Sins and achieve results. Simply put, by creating a proper structure around your trading helps enormously in being able to trade ‘The Hard Right Edge’ of your charts. Structure helps you to manage the Uncertainty which abounds in trading the financial markets.

If you would like help with any or all of the above then give our Trading Coaching and Mentoring Service a try.