If you’ve been trading for quite a while and seem to be stuck, consider the possibility that the next stage in your journey may not require further knowledge or skill development.
Instead, maybe it requires CUTTING POOR PRACTICE from your business?
Do you know what will happen if you cut areas of underperformance from your business? You’ll be left only with areas of best performance. Areas of current best practice. Areas which you already manage well. Areas which, if enhanced even further, may be sufficient to transform your business and take your results to the next level.
Look within your stats and your journals. Find where you currently perform best. And focus exclusively on that area of your business.
Look within your stats and your journals. Find where you perform poorly. And cut it from your business. Implement procedures or controls to avoid it, or to mitigate the risk.
Do you struggle with a strong trend due to a tendency to always try to fade the trend? Stop promising yourself that “Damn it… Next time I’ll just trade with-trend!” You know that you won’t. If you could, you already would. You’ve promised yourself that you would do that too many times already. Focus instead on identifying those conditions in which you outperform… perhaps ranging action or slow and stable trends… and ONLY TRADE AT THESE TIMES. Develop rules for quick recognition of suitable trading conditions, and to alert you to those times when you should just walk away. Specialise in ranging market conditions. Or specialise in slow and stable trends. Whatever works best for you! But recognise and avoid the strong, fast trends if they’re destroying your edge.
Do you struggle in choppy, sideways price action but outperform in directional markets? Identify structural features that suggest initiation of a new trend. Wait for these to develop… confirm the trending action… and engage the market. But otherwise, stand aside.
Do you underperform in volatile conditions? Measure market volatility and stand aside when it reaches these higher levels.
Do you underperform in markets suffering low levels of volatility? Again, measure market volatility and only trade at times when the market is moving.
Do you struggle in conditions of low liquidity? Stop trading markets or times which suffer from low liquidity.
Do you find yourself underperforming in slow and thick market conditions with high overlap between price bars? Then implement some method of identifying and trading only when price has some directional conviction and is flowing smoothly.
Do you struggle in timing tests of support or resistance, when price turns just before the level? Then forget about them. Cut them out of your business. Don’t trade unless price breaks the level, focusing solely on breakout failures or breakout pullbacks.
Are pullback entries destroying your edge, when there is no structure to lean against? Then only trade a pullback when it moves into areas of prior structure (swing highs or lows). Or require that it develops it’s own structure first before considering pullback entry. Only enter when you have some level to lean against.
Do you trade multiple strategies? Is one underperforming? Cut it. Focus on what is working best.
Do you trade one strategy across multiple timeframes? Perhaps a “daily chart” strategy alongside intraday swing trading? Is one destroying your profitability? Cut it. Focus on what is adding the most to your profitability.
Do you trade multiple markets and find that some only contribute breakeven results AT BEST. Cut them. Focus on those that you read the best.
Do you have a tendency to often give back profits during the afternoon? Stop trading at midday! Or set a session P&L trailing stop.
Are the opening sequences consistently putting you in a hole, requiring that you spend the next couple of hours fighting just to get P&L back into the green? Then stand aside at the open. Let the market create some structure first.
You don’t have to do it all. Cut areas of underperformance. Or if not possible, then work to limit their impact.
And work to specialise in areas of your current strengths.
Is there one setup in which you perform the best? What could happen if you focused exclusively on that setup for the next few months?
Is there one type of environment in which you perform the best? What could happen if you focused exclusively on that environment for the next few months?
You may be thinking, “But won’t this seriously limit the number of trades I take?”
So what!
Are you here for lots of trading action? Or are you here to become a trader?
Look within your stats and your journals.
Find where you perform best.
Cut the rest and FOCUS only on developing and enhancing that which you already do best.
You can always address the areas of poor performance later, if you choose to do so.
But right now it’s time to end the mediocrity. It’s time to fight to get to the next level.
Cut what’s not working. And focus only on areas of current best practice.
Perhaps you are closer to profitability than you thought?
Happy trading,
Lance Beggs