Trading Like A Professional: How To Creatively Become Your Own Trading Coach

If I were to ask you who the most powerful trading firms in the world were, what your answer be?  Most likely, you would answer with the names such as Goldman Sachs, Deutsche Bank, UBS, HSBS, and JP Morgan.  And you would be right.  These are the most powerful trading firms in the world.  Now, have you ever considered the fact that each of these trading firms have a trading floor where all of their traders report to work each day?  Probably not.  However, this is very important.  Stay with me.

Why do you think that major investment banks have a physical foreign exchange trading floor?  Why don’t they simply allow all of their traders to log in remotely from home?  If they did allow their traders to just stay at home and trade each day, they could probably save hundreds of thousands of dollars each month in operating costs.  The reason is simple.  Trading at home by yourself is extremely challenging.  Most people who are interested in learning to trade will be trading from home by themselves.  This lonely work environment poses several significant challenges to the average person, but the good news is that as stay-at-home traders, we can still approach the market with the same business-like professionalism of a trading firm.

Who Is Your Team Leader?

In a hedge fund or true prop trading floor, each trader will have a mentor and manager that he directly reports to.  This mentor/manager will offer constructive feedback to the trader concerning areas where he needs to improve, and the manager will help the trader continually refine his trading edge.  Furthermore, the manager will help the trader monitor risk at all times, and a trader undergoes continual evaluation on a daily basis.

If you are trading from home, you are at an immediate disadvantage because you have no one objectively viewing your trading activity and offering feedback.  A trade coach is an essential element of trading success at large hedge funds and prop floors.  Therefore, a stay-at-home trader has two choices.  Either he can attempt to find a very successful and experienced trader and try to convince him to become his trading coach, or he can become his own coach.  The reality is that most successful traders do not have the time to offer micro-guidance to aspiring traders, so the most likely scenario is that a stay-at-home trader must become his own trading coach, whether he is trading a real account or a forex demo account.

Review Time

This is such an essential element of trading success, but this is rarely done by most stay-at-home traders.  You must be your own coach and make the best financial decision like when you try to get a usda mortage.  One way to effectively do this is to take a screen capture of every trade you take each day.  Make notes on the chart concerning why you took the setup, how you managed it, and the outcome of the trade, and then file it away.  At the end of each week, conduct an objective and honest review of your trading decisions for the week.  How well did you stick to your plan?  Did you manage trades appropriately by staying within predetermined risk parameters?

Use Your Losers

Many new traders are very attached to the emotional sting of the loss of money.   Therefore, when they suffer a losing trade, they attempt to move on as quickly as possible and look for the next setup.  This is a critical mistake.  Your losing trades have invaluable information.  Review them, critically analyze them, and attempt to get a clearer understanding of your trading strategy.

When a trade works out and you make money, what happened?  Most likely, exactly what you thought would happen!  But when you have a losing trade, something went wrong.  Something happened that you most likely were not expecting.  Identify that.  By analyzing your trades in this manner, you may begin to unearth clues from the market that tell you not to take trades in certain market conditions or at certain times of the day.  Commit to being your own trade coach!

 

 

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