You see a lot of traders on Twitter talk about how much they love the weekdays because of trading. A lot of them say that they like weekdays more than weekends. It’s true, trading is the best profession in the world when you’re winning, and you just want to keep trading.
But weekends and holidays are actually a crucial part of a trader’s development. Days off from the market provide a break from the hectic style and are an important time for reflection and improvement. Trading can get stressful times, even when you’re winning and weekends are a great time to relax, reflect, and recharge.
Many traders know they should be working and studying on the weekends and when the market is closed. But many don’t know HOW to study correctly to get the most out of their time. Here are the best ways to improve your trading when the market is closed:
Review Your Recent Trades
Studying your trades is not optional if you want to become a consistently profitable trader. No one else can do the work for you. What isn’t measured, cannot be improved. We use Tradervue as our trading journal. You can upload all of your trades as a .csv and they will automatically show your chart executions for you to learn from.
Figure out what you’re doing right, and figure out how to replicate it. Also, study what is not working, and figure out how to eliminate the behavior from your trading. For more tips on how to keep a successful trading journal, check out this article here.
Refine Your Strategy
When you review your trades, you should be looking for ways to refine your trading strategy to decrease the size of your losers and increase the size of your winners and improve your accuracy on your trading. All trading strategies can become more refined.
For example, when you review your trades, you see that trading earnings winners that are gapping up more than 30% fail 65% of the time. After seeing this pattern in your trading, you make the refinement to not trade earnings stocks that are gapping up more than 30% on the day. Simple refinements like this to your trading strategy can a big impact on your PNL by the end of the year.
Every successful trader I know studies hundreds, probably thousands, of stock charts every single day. Studying charts helps build muscle memory for winning patterns. A trader studying charts is like a professional athlete practicing their craft.
When you study charts, you start by looking at the biggest movers from the past week. See what their catalyst was, what pattern ignited the move, what their daily chart looked like, what their intraday chart looked like. Start building your watch list for when the market opens next.
Study Other Great Traders
Even after trading full-time for over a decade, I am still constantly learning new tips and tricks from other traders. Reading trading books is an easy and cheap way to study and expand your trading knowledge. It sometimes just takes one small insight or idea to turn a struggling trader into a profitable one.
Taking A Break
I know a lot of traders that work way too hard. Yes, there is such a thing as working too hard. They burn themselves out from trading 7 hours a day and then studying non-stop when the market is closed. There are diminishing returns of working hard after a certain point I’ve found over the years.
You will be amazed by how much your performance will improve by getting away from the markets completely after a long week of trading and studying. Giving your brain some time to unwind and recharge can immensely improve your performance for next week. Sometimes to avoid burnout it is a good idea to take a week or two off to really reset.