Trading success is closer than you think

Exciting news this week is that we’re about to reopen the doors on my Bread & Butter Trader strategy.

I’ve been reluctant to take on too many traders with this, as I wanted to be sure that I could offer full support to all members. That said, most clients have picked this up and run with it! Which is why I feel that it’s a good time to let some more people in on the action.

And what action there’s been!

“A very good course, and the only one (in four years) where I have actually understood how to enter a trade; amazing what this does, for the confidence problem. Am enjoying trading, at last, and extremely grateful.” RAP

“You have done a fantastic job. The clarity of the manual, the regular videos and your ongoing interest in your pupils is way beyond anything I have previously come across. Congratulations!!” SW from Cornwall

Please watch out for my email next week letting you know how you can test this out for yourself.

Drawing up your rules

In my posts over the past couple of weeks, I’ve touched on the importance of discipline and consistency in trading.

It’s one of the areas that many, many traders struggle with, as we flit from one set of rules to another, discarding ideas and strategies as easily as we change our socks.

I spent a long time trudging my way through different technical indicators … different trading styles … and different instruments … before I settled down with my Bread & Butter trading system.

One that’s remarkably simple when I look back at some of the complicated trading techniques I came up with when I was trying to “outsmart” the markets!

Whether you’re in the market for buying trading strategies, or you develop your own, or you do what many traders do – creating a hybrid of other people’s strategies with their own adaptations … the most important thing is to have a set of clear rules that you can follow.

It’s the only way to keep your trading decisions on the straight and narrow, and to have a recordable track record, so you can keep an eye on what’s working and what isn’t.

If you aren’t trading with a disciplined trading strategy or plan, then now is the time to get one in place.

A couple of weeks back, we looked at the key questions that any trader should be able to answer …
• What are my criteria for entering a trade?
• What markets do I trade?
• What are my criteria for exiting a trade?
• How much will I risk on a trade?
• What times do I trade?
• How will I monitor my results?

If you haven’t yet got these covered, then please waste no time in getting a plan into action.

But if you can answer these questions, you still need one final ingredient to make this work for you …

… the ability to stick at it.

Trading by your rules

Some people are naturally more disciplined than others. This is what I like to remind my wife when she’s wading through the mountains of receipts and bills that she keeps piled up precariously on the side in the kitchen.

But even if you have the self-control of a Shaolin monk, trading discipline isn’t something that comes naturally – it needs to be worked on, and constantly monitored.

Here’s a checklist of issues you should always be asking yourself …

1. Number one on the list of the disciplined trader are the set of trading rules. (We’ve already got this covered.)

2. Number two is a detailed trading journal – actually recording your results on a spread sheet is the best way to monitor your progress and to notice when you’re going off track.

Surprisingly few people do this, and, while we can all enjoy writing about our winning trades, tracking results if one of the first things to fall by the wayside when trading goes through a rough patch. These are exactly the times that we most need to be keeping a good record of results, but psychologically, it becomes difficult for traders to write down those losses at the end of the day.

(Remember, the Trader’s Bulletin trading journal is a good place to start if you aren’t already doing this – click here.)

3. Keep your eye on the prize. Remember why you’re trading, and set yourself achievable targets to aim for. If you want to be able to stick with your trading, these goals need to be achievable – bear in mind how much money you have to trade with … how much time you have to devote to trading … how much experience you have … and that there will inevitably be rough patches and set-backs.

4. Identify your weaknesses – unless you’ve spotted where you go wrong, you won’t be able to work on improving those areas of your trading. Watch how and why you break your own rules – what are your weaknesses, and how can you adapt your trading rules to accommodate these parts of your personality? If you can’t resist taking irrational “what if?” trades, then open a different trading account with some play money in for these trades – that way they can be your “hobby” rather than interfere with your serious money-making business.

5. Stay positive. Don’t allow yourself to be sidetracked from your goals because you’ve had a bad day … or the markets aren’t behaving how you’d like. Learn to recognize if you’re in the wrong frame of mind to trade – there’s no shame in logging out of your trading account and taking a couple of days off.

6. One technique I’ve used in the past is to give each trade, as I place it, a score out of 5 – i.e. how good a set-up do I think it is? That way, when I come to look back through my trading journal, I can see whether I’ve been able to identify which are the best trades, and whether I could then eliminate the worst trades by just dropping anything with a score of 2 or below.

By trading within these guidelines, you’ll find that you can learn from mistakes and slowly turn your bad habits into good ones.

Related posts:

The boring secret to trading success 4 ways you’re sabotaging any chance to make money from trading