Year 2018 kick-started with a bang. There can’t be a better time other than the start of the year to revise your trading performance, to correct past mistakes and to explore better trade opportunities. Optimizing trading performance requires a meticulous effort. Here are some of the trade resolutions which could fine tune your trade performance and put you as a better professional trader.
Create a Trading Journal
Creating and Maintaining a trading journal says a lot about you and your risk taking ability. By documenting your trades helps you become a more efficient trader by learning where you do well and where you do less well. Its not just about recording your trades but also your trade plan before approaching the market, methodologies you used, how emotional you are when comes to certain market movements, are you booking your profits too early or you are holding on to your losses too often.
If you are frequent trader in the markets then its going to be a tedious job however having a well documented trading journal reveals your psychological approach towards markets, how egoistic trader you are and how often you are involve in revenge trading.
Cost of Trading Journal starts as low as Zero. You can maintain your trades in Excels/Documents preferably Google Docs. To record your trade plan you can use content management tools like WordPress/blogger to record your trades and trade plan.
More the details you record about your trades and trade plan the more you are going to discover yourself and that keeps you in control in your trades.
Choose Better Analysis Tools
If you haven’t spent time with Trading analysis software or still relying on age old trading tools, then its better time to switch to cutting-edge software analysis tools combined with robust datafeeds. Better analysis tools are the one which brings flexibility and ease of use when comes to design and implement your own trade ideas, validating or even automating your trade ideas. Some of the better trading analysis platforms include Amibroker, Ninjatrader and if you are very good with your programming skills then python or R is where you can develop your own custom trading analysis environment.
If you are a investor then apart from better research tools you might have to focus on getting a survivor-ship bias data which is adjusted to split/bonus/corporate dividend etc. Its better to always rely on high quality and authentic data vendor rather than sticking with low cost skewed datafeeds.
Reduce your Trading Cost
Whether you are a profitable trader or not Trading cost money and in the long term it adds up to a significant expense. Avoid over-trading that keeps you continuously active in the market. More you are going to engage with the market the more your trading costs are and the less productive you are!
Adapt trading strategies that reduces splippages and even switching broker from premium full broker to discount broker (Zerodha, Upstox, Tradejini, Tradesmartonline) save lots of money in the long run.
Avoid options expiring at In the money. As Exercising In the money Options cost a lot of money
Create your own Trading Process
Learn to simplify your Trading process which brings clear cut stand on your trading discipline. A Trading Process could include
1)When to Enter, When to Exit
2)How long to hold on to positions
3)Whether to hedge or not to hedge
4)When add to exiting positions or cutoff some of the open positions
5)When to take low risk or higher risk
6)When to start a system and when to stop a trading system
7)What is your Emotional Portfolio stoploss
8)Script level stoploss, Mental Stoploss or Per Day/Per Week stoploss
Try to avoid indicates that doesn’t worked for you in the past. Throw away indicators which you are not able to handle emotionally. Dont get obsessed with
indicators because it looks good visually. Learning more about the indicators you use and understanding how it performs in various market conditions helps you to narrow down and simplifying your trading process.
Consider automation if you have a solid rules as automation brings efficiency in your trading and saves a lot of cost in the long run and improves your productivity. Think about building a system that is scale-able which requires less market time to supervise.
Explore Better Edge
Whether you are a full time trader or a part time trader exploring the edge is a continuous process which requires a serious learning commitment and at times a serious time commitment as well. Spend most of your time in understanding market, market dynamics which keeps you to trade in any kind of market environment. Invest your time in better trading education.
Try to understand what most of the trading community adapts and tend to stay away from such methodologies. Try to get excel in trading strategies when are less adapted by market participants where the edge is likely to sustain in the long run as it may requires a solid time commitment and might not be easy to adapt with little or zero learning curve.
Scroll through popular and serious trading forums and stick with professional traders on social media. Try to learn maximum about their trade approach rather that what they trade. You can find some very knowledgeable traders willing to share their in-depth knowledge with newer aspiring traders without a hefty price tag. Less engage with business channels and spend less time in watching your Market to Market Profit/Loss
We wish you and your families a prosperous and healthy new year!