Part 1: Taking control of your trading and investing in 2021
How can we take control of our trading in 2021 effectively? We, as an online trading academy, want to share a few tips to aid you throughout the year.
Part 1: Taking control of your trading and investing in 2021
As we reflect on our past results and outcomes in the world of trading and investing in the forex, futures, and stock market, this year will present an opportunity for us to improve and excel while working on a new set of goals. This is an opportunity for those who struggled last year to employ a different approach towards trading and investing in the financial market, including getting rid of patterns that prevent you from moving forward with your trading and changing how you tackle trades through the new year. For the consistently successful traders, perfect and maintain the good patterns that aided your progress in the past year. It's also a time for you to work through your trading strategies and let go of bad habits that prevent you from progressing.
It’s crucial as a forex, futures, and stock trader, be you a novice trader or one with over ten years' experience, to note your goals and stick to them for the rest of the year. Though your experience and skill of trading have likely increased last year, we, as an online trading academy strongly recommend modifying your existing trading plans every year. The information our online trading academy will share will be as justifiable as it was in the last decade because market participants' psychology and the market itself are static.
So how can we take control of our trading in 2021 effectively? Let's share a few tips to aid you throughout the year:
Stick to a particular trading strategy (e.g. supply and demand) till you get to grips with it:
This year, at least try to channel your focus on one trading strategy instead of dabbling with numerous strategies. Study only one trading strategy like supply and demand. Resist the urge to shift to another system.
Limit trading time and commit more to educate yourself about trading (build your skill first!):
Many forex, futures, and stock traders lack control over their emotions as long as trades are involved. Unfortunately, some may go to the extent to spend long hours glued to their computer screens, watching open trades, continually entering and exiting trades. No matter how apt you may be at other endeavors in your life, this doesn't exclude you from becoming a victim of trade addiction because it can happen to anyone. Watching the charts night and day to know the next best time to jump in on trade will only terminate your trading career and the possibility of becoming a consistently successful trader.
If you’re looking to get some delight in the forex, futures, and stock market, think again because it doesn't happen. Trading and investing in the financial market is synonymous with watching a paint job dry up. It doesn’t pay to monitor a market; no one has control of it continually. You can afford to spend less time, even less than an hour in a day, to examine the charts and determine what your next trade moves will be, and manage open trades.
Work on your personal bias about trades and the market:
Typically, every trader viewing the market examine the market based on these questions; “are you in a trade?” and “are you looking for a trade”? This “confirmation bias” is one that most traders find difficulty getting rid of without any prior practice and experience. Most traders set their minds to a bias by default and, because of this, tend to make errors.
Examples of such bias include:
After going long (buy order) in the Gold market now and it increases to $20 in a day, your confidence rises. Next thing, it’s being published in the news that Iran has gone to war and gold is likely to increase, your confidence peaks even higher.
The second example would be the opposite of the above:
Gold drops $20 after going long, and you feel less assured, the war in Iran was avoided, and Gold is likely to drop even further; your confidence becomes almost inexistent.
The news of Gold's volatility or Iran's possible war break out wouldn't have affected your initial trade entry and price action setup for entry confirmation. Still, despite this, 95 percent of traders develop a bias based on these “confirming factors” that form. It is advisable to approach every trade decision, be it a trade entry or exit or in between trades, with a hundred percent detachment, no bias of any kind, or any form of dependability. This means you should have an unsympathetic and unconscious manner of approach towards trading. Realistically speaking, this theory is usually challenging to execute in the real world, and working on it takes lots of practice.
To master the “trading game” in the forex, futures, and stock market, we need to control our emotions to play. Our evolution history as human beings is instrumental in how we think and function generally.
You’re the only one who can influence your trade decisions. Don’t go about looking for online news articles on trades to know if you made the right or wrong call. Such articles only succeed in making you second guess your trade decisions and further diminish your confidence in the market.
Beware of recency bias:
Recency bias favors recent events over older ones. In other words, people believe what happens now will continue to occur in the future. Likewise, in trading, traders think that inclining stock markets will continue in the same upward trend in the future. We conclude and agree that what happens now will continue in the same fashion, especially when it's positive, without considering opposing views or the opposite will likely occur. Classic human behavior!
Take, for example, a trader with multiple wins in all his trades for three months. With each passing day, the wins last, their confidence climaxes, and they start to feel on top of the world. With this over-confidence, this same trader increases trade risks to extreme levels, completely ignoring his trading plan and fixed business rules.
A trader blinded by recency bias tends to trade in a different method, which brought them their recent success. Eventually, this overconfidence and self-centeredness will lead them to give up their acquired gains. Treat each forex, futures, and stock trade experience as an irreplaceable one. Don’t become overwhelmed with your success and let it get to your head. Stick to your trading plans and the rules of business.
Document your significant goals and read them to yourself once in a few days as a form of declaration:
Declarations taught by successful business authors like Napoleon Hill and Carnegie have proven to work throughout our over sixteen years in the trading business. Try to write your achievements or what you hope to achieve and read it to yourself every day as an assurance. Setting your affirmation goals is more complicated than just documenting somewhere your hopes and aspirations to "be rich" or "be an excellent trader." Your goals can be positively assumptive of an impending result such as "I am," self-commanding such as, "I must," or forward-looking such as, "I will."
"I will become a profitable trader by repeatedly managing my risk and my emotions."
"I'm an expert trader."
"I must trade like it's a commercial institute.”
"I'm unaware of what trade setup will win or lose; therefore, I must take every trade that matches my trading plan without questioning it."
If you want to learn more about professional trading and investing across multiple asset classes such as forex, futures, and stocks, please sign up here for free at our online trading academy www.onlinetradingcampus.com and get access to a free three-hour introductory course.
Happy and successful trading in 2021!
Author Bio: Bernd Skorupinski teaches the undiluted truth about trading and investing at Online Trading Campus and takes you through what it takes to be a consistently successful trader. His favorite moment as a trading mentor is the way peoples’ eyes light up with excitement and confidence when they understand how Supply and Demand trading strategy works and how it can help win in the trading arena. He believes in building core values and discipline that ensures his students do not succumb to the pressures and temptations of the market. He very much believes in following plans and strategy through. If you want to know more about the author Bernd Skorupinski please read here