5 Trading Lessons from 2017

There’s only a few weeks left until 2018 so I thought I’d close out the year by sharing some of the trading lessons I learned this year:

1. Don’t Trade Without A Checklist –¬† There was a point in the year where I thought I knew the criteria for trade entries inside out and decided to abandon my entry checklist. This ended up being a big mistake as I found that I would occasionally take trades that did not meet all of my criteria. For example, an opportunity may have a standout factor and I’d rush into the trade without validating the rest of the factors thoroughly. No matter how good I think I am, mistakes can still happen. An entry checklist helps to keep human error to a minimum and is a good way to mange common issues associated with psychology especially when trading with size.

2. Prepare Like a Professional – Showing up is the first step but it’s not enough. You have to be ready to make difficult decisions. This year, I started waking up earlier than ever (5am) and it has had a positive impact beyond trading. It may seem that waking up early would mean more screen watching but I don’t actually trade the entire day – I only focus on a specific 2 hour window to do business now because I couldn’t see myself trading the entire day in the future as it seemed too intensive and unhealthy. I think I can sustain the way I trade now until whenever I decide to stop which I hope won’t be any time soon.

3. Join a Trading Group – One of my goals last year was to create or join a trading group. I mentioned this in a few posts this year and the benefits of chatting every day to a group of like-minded traders have exceeded my expectations. It’s a great source of trustworthy information and everyone trades a similar way so experiences and lessons shared are often very applicable.

4. Reduce / Eliminate Social Media During Trading Hours – I got tired of social media and have even unfollowed some trading gurus on Twitter. I’ve realised that there are too many people that don’t do anything apart from try to occupy your mental real estate. You probably know the type, posting half a screenshot of a rare winning trade or habitually making cryptic postings that no one really understands.

The great thing about being in a group with actual traders that are, quite frankly, exceptional at what they do is that you don’t need that noise from anonymous posters. There’s more trust inside a closed trading group and the quality of discussion is much better. i.e. If someone posts a screenshot of a trade, they are more inclined to explain that trade idea in detail because they know it won’t be shared in an open setting.

5. Trade Fewer Markets – I experimented with adding more markets for a few weeks this year and I didn’t enjoy it at all. The first few days were fine but I began to notice that it changed the experience of trading. Analysing the markets in the morning took longer and I would sometimes miss good opportunities or make mistakes. I felt rushed and instead of looking forward to start a new trading day, it had the opposite effect. I decided to stick to my core group of 11 FX pairs because I feel that I can analyse and manage them easily.

Even though the above probably reads like I traded terribly this year, it was actually quite the opposite. The experiments were worth it and my trading  improved. It was probably due to this type of transparency and internal reflection that I was able to make small changes which ended up having a significant positive impact.

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