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filler@godaddy.com
Signed in as:
filler@godaddy.com
Select a single approach and focus exclusively on it for several months.
Examples:
Study:
One strategy. One market. 2-3 timeframes max, preferably 1. One risk model.
Limit the amount of information you access. This seems counterintuitive as logically it seems the more the better, however according to the 1957 study (The Magical Number Seven, Plus or Minus Two) Americal Psychologist, George Miller, shows that any one person can only process about 7 chunks of information at a time (+ or - 2). I learned it as 5-7 bits of information at a time + or - 2.
Either way all of our trading decisions boil down to when to buy and when to sell, and too much information causes confusion and second guessing ourselves out of good positions and into bad ones.
Select a single approach, limit yourself to minimum amount of information necessary to make your decision, and focus exclusively on it for several months.
Document:
If a setup cannot be written as a checklist, it is probably too discretionary.
Like everything else in life, it's common for traders to try to force their will on the market in order to make trading work for them, and they often lack a defined system in trying to do this.
The solution to this is to create a written ruleset. If a setup can not be written as a checklist, it's too discretionary which can lead to confusion, hesitation at the wrong time, overwhelm, discouragement, etc. Conversely, having a clean set of rules frees up an exorbinant of mind operating power to use.
Standard guidelines:
Protect capital first; profits are a byproduct.
Many problems in life can be solved by paying for a solution, however the problem that commonly holds traders back has nothing to do with the amount of money they throw at the problem of inconsistency.
A short regulation sequence before decisions can reduce impulsive behavior:
No regulated state, no trade.
After countless hours of analysis and planning many traders grow impulsively frustrated at the market when it behaves differently than they predicted. As a result they try fighting the market to get their money back, angry trade after angry trade, only to end up giving the market even more of their hard earned money.
Examples:
Use rules to override judgment distortions.
Frustrated by the market's mytery, many traders spend countless hours infront of the trade screens, hoping to solve the problem by putting in more hours, missing family time and important events, only to find themselves right back where they started, only more frustrated with less money in their trading account.
Typical progression:
Reasonable goals:
Focus on process; consistency develops over time.
Frustrated by the market's mytery, many traders spend countless hours infront of the trade screens, hoping to solve the problem by putting in more hours, missing family time and important events, only to find themselves right back where they started, only more frustrated with less money in their trading account.
Test one strategy for a meaningful number of trades, often 50–100 or more.
Track:
Evaluate data, not recent emotions.
Frustrated by the market's mytery, many traders spend countless hours infront of the trade screens, hoping to solve the problem by putting in more hours, missing family time and important events, only to find themselves right back where they started, only more frustrated with less money in their trading account.
A valid setup can still lose.
Each trade is one event within a broader distribution of outcomes.
Execute the edge; do not demand certainty.
Frustrated by the market's mytery, many traders spend countless hours infront of the trade screens, hoping to solve the problem by putting in more hours, missing family time and important events, only to find themselves right back where they started, only more frustrated with less money in their trading account.
Helpful constraints:
Make the correct action the easiest action.
Frustrated by the market's mytery, many traders spend countless hours infront of the trade screens, hoping to solve the problem by putting in more hours, missing family time and important events, only to find themselves right back where they started, only more frustrated with less money in their trading account.
Record:
What gets measured can be improved.
Frustrated by the market's mytery, many traders spend countless hours infront of the trade screens, hoping to solve the problem by putting in more hours, missing family time and important events, only to find themselves right back where they started, only more frustrated with less money in their trading account.
Limit:
Use others for education, not for trade decisions.
Follow your plan, not someone else's conviction.
Frustrated by the market's mytery, many traders spend countless hours infront of the trade screens, hoping to solve the problem by putting in more hours, missing family time and important events, only to find themselves right back where they started, only more frustrated with less money in their trading account.
Prioritize:
Your physiology influences your decision quality.
Frustrated by the market's mytery, many traders spend countless hours infront of the trade screens, hoping to solve the problem by putting in more hours, missing family time and important events, only to find themselves right back where they started, only more frustrated with less money in their trading account.