Habits To Improve Your Trading

June 19, 2023

Trading/investing is absolutely a mental game, psychology plays an absolutely vital role in the performance of all traders. Winners and losers are made solely as a result of mental edge; some can handle the pressure and some can’t, Some can stay disciplined and some can’t. It’s really that simple.

Sure we have analysis and risk management to consider but all of this stems from your mental performance. Do you have confidence in your analysis? Are you strong enough to resist greed when choosing position sizes for managing risk? Are you hardy enough not to panic and back out of a trade irrationally? As you can see it all boils down to psychology.

How Habits Can Help Psychology

A habit is a routine behaviour that occurs almost subconsciously. People develop and maintain lots of different subconscious habits in every day life like waking up and brushing your teeth first thing in the morning, parking in the same spot at work/uni every day, or a slightly worse habit; smoking cigarettes. All of these behaviours are ingrained into our minds which can be both a good thing & a bad thing, depending on how beneficial/damaging the habit is for your life.

Habits can be utilised for the better to help us improve on our psychology, trading performance and other areas of our lives. If you can ingrain good behaviour into your every day routine you can effortlessly and subconsciously step toward success.

Habit 1: Journalling

Journalling is essential if you want to be successful in the long run. By making note of your trade setups and the routines you have used, you can identify your strong points as well as find weak points to make improvements upon. It can be hard to get into the swing of journalling your work because it’s much more appealing to be on the charts actively trading, but it’s what we do away from the charts that counts.

From now on set aside a little bit of time each day to journal your trades, processes and recent successes/failures in a notebook or on your computer. Tracking winning analysis for strong points and pinpoint the reasoning behind losing trades is a surefire way to refine your processes & trading strategy. After a few weeks journalling will become second nature and you can take advantage of it every time you sit down to trade.

Habit 2: Daily Routine

Developing a daily routine can be a great way to manage your trading and keep everything more organised. Without a daily routine and trading process it can be easy to forget aspects of your strategy like fundamental analysis or certain risk parameters. If you get into the habit of following a daily routine for your trading you will subconsciously go through the motions & never miss any aspects of your trade process.

Here’s an example: Find a time you can sit to do your trading each day, wake up a little earlier if needs be. Sit down & browse financial news & check calendars to keep up to date with fundamental analysis, flick through your journal & review your recent setups & trading plan then get on the charts and review your watch-list. Do your technical analysis and then set alerts at the levels you want to enter.

If you set a time each day and follow the same trading processes, your strategy will remain in place & you won’t slack on your work.

Habit 3: Reading Books

Books are food for the brain. Reading allows to build our skillsets & learn new things, to relax and clear our minds of stress to absorb some valuable knowledge. Reading can help you inside and outside of your trading career, there are lots of books out there that will help you to improve your risk management, analysis and mindset among other skills.

If you don’t already regularly read books you might have a hard time getting into the swing of it when you begin. First of all decide whether you’d prefer physical books to read or digital audiobooks to listen to, then find some books that you’ll enjoy &will benefit your life and get to work reading/listening to a chapter a day. If you find a chapter a day to be too much then cut it down to a better suited level, if it’s manageable then continue at a chapter a day – the more you read the better!

You will find regular book recommendations posted into the Mind Space in the members area.

Psychology Is King

These are just a few different habits that you can develop in order to improve your skills as a trader. If you begin to journal and read as a part of your daily routine and set in stone a regular daily process, you’ll begin to see improvements in your trading performance.

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