One of the most important topics we have discussed before is the need for traders (especially beginners) to focus on the process rather than profits.
The idea is that a good, disciplined trader can always turn the odds in their favor if they hone their skills enough to handle any scenario thrown their way.
But becoming a better trader is not as easy as reading the School of Pipsology and then making as many trades as possible and hoping that the experience will teach you the path to profitability.
In fact, many traders cannot move on from one or two problems they want to address, let alone improve their skills.
If you find yourself having to work on the same set of trading issues or problems month after month or year after year, you may be guilty of one of the scenarios below:
1. You have no concrete plans to address it.
Remember, a goal without a plan is just a wish. The solutions to your trading problems should not be like New Year's resolutions that you forget as soon as you write them in your diary.
Whether it's as simple as not placing stops or jumping on the trend too early or something more complex like cutting winners and letting losers trade, you must have concrete plans if you want to successfully overcome your trading problems.
Set trading goals that work. Write down concrete steps you can take and set a timeline to make sure you follow through. Set metrics to help you measure your success if that helps.
2. You're not actively thinking about it
It is possible to have a more detailed game plan, but still fail to achieve your trading goals if you do not consciously work on it every trade.
Suppose you decide to base your position sizes on your account balance instead of using fixed units. Your plan is to calculate each position before entering a trade. You give yourself a pat on the back for managing to do this for a week.
But suddenly, an intraday trading opportunity presented itself and I chose to get back into the habit of setting fixed trade sizes rather than miss the move.
You may have thought, “Okay, I'll get back to working on my goal for my next trade.” Because you won your trade, you will think “no harm was done” and are more likely to do it again in the future.
These little cheats and vacations you give yourself may not affect you in the short term, but they will eventually add up to break your momentum. Next thing you know, you'll be including “Use Dynamic Position Sizes” in your goals again next year.
3. You're not tracking your progress
Probably the most common reason why you are unable to address your trading issues or achieve your goals is because you are not tracking them.
Just as chefs list the adjustments they make to their recipes, you should also track and evaluate your progress.
What have you done so far? Are you closer to your goal today than you were a few weeks ago? What factors help and what factors should you pay attention to? How can you improve faster? A trading journal is perfect for this purpose.
Revisiting your progress on a regular basis not only gives you a “cheat sheet” in case you slip up and fall back into old habits, but it also helps put your trading goals into your thought process when trading.
Remember that Trading is a marathon, not a sprint.
If you want to day trade to become consistently profitable, you must learn how to successfully address your trading issues and get into the habit of working on (and achieving) your trading goals.
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