As the finale of 2016 approaches, we are each presented with an opportunity to reflect back while looking towards the future. The dawning of a new year is the perfect time to set new goals and embark down uncharted paths. Now is the time to plan your Resolution.
What are our top trading resolutions for 2017?
D iscipline
R esults
I ntegrity
V ictory (Over Emotions)
E ducation
Discipline
Most traders could benefit from being more disciplined with their trading. Discipline in trading takes many forms. But it can be summarized as just doing what we know needs to be done.
If I could target only two things to be more disciplined in next year’s trading they would be:
- Cut losing trades: Do everything to keep losses small.
- Let profits run: Don’t fall prey to the fear of a small profit slipping away.
Losing trades are inevitable, because nobody gets it right all the time. It’s important to take the loss before it grows and does serious damage to our accounts. This requires discipline.
Profitable trades are equally inevitable because nobody gets it wrong all the time either. Here, it’s important to let those profits run, rather than grabbing them at the first hint of a price pullback out of fear that our profits will slip away. This also requires discipline.
Results
Some traders keep detailed records and know exactly which types of trades have been their most profitable, as well as their biggest losers. So a useful resolution is to track trading results more closely in 2017.
When we measure our results, we examine our trading it give us more confidence if we are doing right and keep us at our toes if we are going wrong. Most of professional sportsman will record their videos and see them again to improve the game.Same applies to trading.
Integrity
In the context of traders’ resolutions, “integrity” means taking personal responsibility for our trading decisions and holding ourselves accountable for our results. Nobody is forcing us to buy or sell —we make those decisions ourselves.
When a trade goes against us, it is tempting to find some external source to blame. Identifying a scapegoat may make us feel better in the short term, but we lose the benefit of examining our own decisions and looking for flaws in our thought process.
One analogy is plane crashes. Whenever there is a crash, an investigation identifies exactly what went wrong and, more importantly, how to correct it in the future. All of today’s advances in air travel safety have come from studying the plane crashes of the past.
So our resolution for 2017 is to apply integrity to our trading—to hold ourselves accountable for our decisions and to learn from those trades that don’t work out as planned.
Victory
Fear and greed are two emotions that affect our trading decisions. Unfortunately, they generally lead us to make the wrong decision at the wrong time. While life wouldn’t be much fun without emotions, fear and greed can be hazardous to your trading.
As you look back at losing trades in 2015, identify which emotion (greed or fear) drove your decisions to enter and exit the trade. This will not be easy, nor will it be enjoyable. Yet, it may you help you be a better trader going forward.
As we identify how our emotions have affected previous decisions, we can better recognize when we might fall prey to fear and greed in the future.
Education
I will tie our trader’s resolutions together with our final topic: Education. In 2017, resolve to learn something new to enhance your trading each week. Learn how to trade based on system from professional or trading mentor.
May Financial Year 2017 be your best and most profitable year ever.
Excellent
So true and right to the point
Motivational