I’ve learned everything there is to know about trading.
Says no professional trader, ever.
This is something I teach to my trade advisor students every day: not improving is deadly in this business. Seeing your P/L go south kind of deadly.
Every trader who has made it has done so because of continuous learning. A desire to get better at the trading game. Every single one of those traders has a trader development plan. But what exactly is that?
Keeping a chartbook of trades you have taken might seem like such a random thing to do. A nice to have, for traders feeling nostalgic about past trades, maybe. You might’ve heard people talking about it, but I wouldn’t blame you if you didn’t think twice of it and just went on with whatever you were doing.
I’m here to say that such a collection of trade screenshots (sometimes called a playbook or chartbook) is much less trivial. It might even be crucial to your success as a trader.
Let’s try this experiment: do you keep a trading journal? If you answered “yes” here: well done! Now pick a trade from 3 months ago and look at just the numbers. From that data, you can probably see it was a winner of a loser, your R-multiple, stop loss and take profit placement, MFE and MAE and so on.
But without a chart screenshot,
No? That’s where a chartbook comes in. And it’s not even the only benefit of keeping track with chart screenshots.
Since keeping a chartbook, I found it much easier to stick to the good setups and avoid less than optimal setups. I know what to look for, but that visual double check using screenshots of past setups makes all the difference. But let’s first take a step back. What exactly is it?
I have a confession to make.
I’m completely addicted to trading.
I just love the charts. Regardless if I’m winning or losing. I love analysing price action, testing strategies and finding trading opportunities.
Sounds familiar, you say?
It’s not uncommon. We forex traders are a passionate breed. However, after 5 days of trading, the retail forex markets close. Time to relax and spend time with friends and family. But weekends are also the perfect time to sharpen your forex skills! It’s when most of us actually have some time to research, learn and improve.
The three great essentials to achieve anything worthwhile are, first, hard work; second, stick-to-itiveness; third, common sense.
― Thomas A. Edison
“But the markets are closed! What is there left to do?”
Actually, there’s plenty to do in weekends if you want to sharpen your forex skills! Here are my top 5 tips to improve my forex knowledge in weekends.
“Why do I keep losing money?”
This question used to keep me up at night.
Have you ever wondered this too? I have, over and over again.
When I was still struggling to become a profitable forex trader, I was desperate for the answer. Not only that, I wanted to identify the various pain points that made forex traders lose money. Find a structured way to tackle them. I wasn’t going to be a losing trader forever, no way. So I started researching.
The short answer is of course because it’s really hard to be consistently profitable.
But why? There are enough traders with a proven track record, so it must be possible. During my search, I’ve identified 5 of the most important reasons why traders lose out. I’m pretty sure that at one point or another, I’ve been through them all. But once I started working on them, I noticed a real turnaround in my trading performance! I couldn’t believe this, it really worked.
Building your trading plan will be by far the most important part of your forex trading success. Too many forex traders are currently entering trades without a clear vision or goal in mind. They have a fear of missing out. They have a “feeling” that their trade is going to be the winning one, raking in loads of pips! When it turns out that the charts didn’t go their way, the first reaction is to quickly try again and forget the losing trade. Keep in mind that the fading affect bias is a powerful cognitive bias! This approach eventually leads to losses, pushing profitability even further away.
These traders lack a trading plan, a well-defined description of the “what” and “how” of their trading business (notice how I said business. You should treat it as such if you want to take forex trading seriously!). In this post, I will guide you through the steps needed to make such a trading plan, and give you a template of how a trading plan could look like.