Becoming self-aware is a key step to growing as a trader. Not only will it ‘humble’ you and remove any erratic emotions out of your trading process, but it will also help you identify pitfalls and holes in your strategy. It will also help you succeed in other areas of life. It is one of the most important
Analyzing yourself and becoming aware of who you are as a trader, becoming aware of your strengths and weaknesses, is something a lot of traders never do. As a result, they struggle to make consistent progress and never really understand WHY they cannot reach that next level of profitability.
Today, we are going to break down some of the best ways to help develop your self-awareness as a trader so you can make sure you are growing day by day and focusing your time and energy on the right areas to improve your trading:
Journaling is HUGE for becoming self-aware. If you don’t journal and keep stats on your trades, you will never know how to improve. You will never truly find the ‘holes’ in your strategy if you don’t know what you are doing right and wrong.
Keeping records on your trades, setups, and thought processes during each trade will help you become aware of who you are as a trader and what you do right and wrong.
Making a chart like the one below of what works and what doesn’t as a trader will help you become aware of the key messages your stats are trying to tell you:
Know Your Personality
So many traders try to fight their natural tendencies in the market. The stock market only amplifies your natural habits and personality. If you are naturally impatient, you will have a ton of trouble swinging stocks and holding long-term. If you are bad at making fast decisions, day trading will be a big problem for you.
Whatever the case may be, you need to become aware of your natural personality. What type of person are you?
Patient, or impatient?
High risk or low risk?
Anxious or calm?
You need to identify that and adopt a strategy that fits and uses your natural personality to its advantage, and doesn’t try to fight it. Become aware of who you are, and work with that, not against it. Don’t waste time trying to change who you are to fit a strategy.
This video lesson will help you discover what is the best style of trading suited to your personality:
Have Rules That Protect You From Yourself
Once you start to learn and understand who you are as a trader, you need to make rules to protect your trading account from your most destructive tendencies. No one is perfect, and everyone has weaknesses that can cost you huge amounts of money if they are not addressed.
An example of this is using a daily max loss. A daily max loss locks your trading account after you go down a certain amount of money per day. Often traders will lose money and revenge trade to make it back. They will be trading emotionally and often cause themselves to go into an even bigger hole and lose massive amounts of money. A daily max loss will prevent one trading day from wrecking your trading account, and protect you from these destructive tendencies if you have them.
Get Others Feedback
Often times we have trouble getting a clear picture of who we are as a trader, and as a person. It is easier for many to view others’ character strengths and weaknesses objectively than on your own. This is one of the most important steps we take with boot camp students during their early months with us.
After they graduate class and start practicing on the simulator, our instructors grade and look at their trades, and tell them what they are doing right and wrong. This direct feedback makes all the difference for aspiring traders.
Our boot camp student last week had his first $5000 after taking our boot camp last year:
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