Your Christmas Homework
We all want to be better traders going into next year, but it is not going to be given to you on a silver platter without any work. The markets tend to usually range or not move a lot, usually around the summer holidays and the Christmas period. But most of us don’t use this time to our advantage and have a deeper look into ourselves.
Excited for some Homework?!
When I first started in 2020, at the end of the year, I did a few things to improve my trading going into 2021, and I still do to this day, as you can always improve in trading. If you do this, you are giving yourself a better chance of getting closer to becoming a successful trader and entering the 10% club. So here are a few things you could do during the holidays as we have around three weeks off from this weekend.
Journal
I know this is the boring bit, and most of us find it hard to keep up to date with every trade. But there is a more straightforward solution. Just link your account to Myfxbook. It will record all your trades and has enough metrics to give you a good insight into your trading. It also lets you leave comments about your feelings about the trade. The best part is it is free. Yes, there are paid versions which also automatically import all your trades and provide metrics. But Myfxbook is good enough for a starter.
Data
In the modern world, everything is about data. Even your workplace focuses on data, as it wants to use it to improve areas where it is performing poorly. My previous workplace relied heavily on data, as it had to record factory performance, machine performance, cigarette sales, types of cigarettes sold, and much more. Excel was their best friend, and Power BI, a new software that is not so old, has made analysing data much quicker.
What are you doing if you don’t have any record of the trades you took, whether my fxbook or even your journal? What are you measuring? It is almost like a headless chicken running around on the farm and not knowing where to find food or a fisherman going into the wrong place to place his nets to catch fish. Without your trade history, you will never know how to improve on the things you are doing wrong. I’ll show you how below.
It is the most minor things
When I first looked at my data in the first year, I spotted a few things.
- I traded many pairs as I experimented with which pairs I performed well on. I saw a few pairs I didn’t do well on, so it made sense to remove those and focus only on the ones I did well on. Why fight something you are not good at?
- Mondays were my worst days, and I lost many trades. Hence, I always tell you that I’m never in a rush to get into a trade at the market open or early morning in London. I just wait for the NY open to see what the US traders think. If nothing changes, I would only consider proceeding with my plan. This is because I realised there are a lot of fake-outs on Mondays. Tuesday, Wednesday, and Thursday were my best days.
- If you sit in front of the charts during the day, you might want to check whether you do better in the London or New York sessions. Have you ever considered that?
- Some traders do better buying or selling. It’s bizarre, but yes. You can check if you are better at longs or shorts.
- Are you holding your trades long enough or getting out early? What would the result be if you held the trade as per your plan? You might realise you could have 500 more pips this year.
- Your average win should be higher than your average loss. In this way, you know you are taking high-probability trades.
- How many strategies are you trading on your account? Are you trading M2, something of your own, or E&S ? If you trade more than one strategy on a single account, you will never know how you would perform trading a single strategy. My advice is to have a separate account for M2 trades and another for E&S or if you like day trading.
- Check your entries and stops, whether you took a loss or a win, to see if you could have done better. Then, you can improve next time.
When I took into consideration some of these pointers I was able to increase my win percentage in the following year. I hope this helps, let me know in the comments.
You are your own best friend, so talk to yourself and take a deeper look over the holidays. I do look in the mirror and it tells me I need to work out more in the gym 🙂
I hope next year is a lot better than this year and I wish you all a Merry Christmas and Happy New Year in advance.
Kind regards,
Ashley