Every trader wants to make the most of their time by trading in profits. The market is complex, and plenty of working parts come together to make for a successful trade day. However, most traders end up actively engaging in being present, analyzing charts, going through books, and studying courses in an attempt to upskill their trading abilities.
Notably, being active during the trading window is not enough. There’s a lot a trader needs to keep in mind, ranging from the industries that have the potential to grow to the tax implications of day trading and the potential potholes to avoid.
Here are some purposeful steps to take that will turn you into a highly skilled trader:
1. Have someone you can stay accountable to
Instead of being a lone wolf, consider having someone who can act as a referee and help you recompose yourself if things go wrong. While you are doing your bit to stay motivated and disciplined, there are days when you need someone who can help you stay on track.
Having someone holding you accountable will lower the times you make mistakes, while encouraging you to take mindful actions even in the most rushed scenarios. This someone can be a coach, a mentor, or even a close family member or friend who is aware of your financial goals and can guide you. Consider keeping them updated about your performance and if your trades are aligning with the strategy that you have been following. A coach or a mentor will be able to identify potential roadblocks and fine-tune your strategy for better performance.
2. Avoid getting influenced by other’s opinions
Unless an opinion is coming from a trustworthy source (a reputed website, an expert, or someone with extensive experience in the industry), avoid taking advice from anyone. Keep your trades strictly as per your trading plan. Regardless of the opinion that’s floating around, sticking to your plan will ensure you are taking measures to increase the value of your portfolio or protect it from market-related losses. Following your own plan will help determine what’s working for you and what needs to improve.
Constantly changing your mind based on the opinions around you can weaken your foundations and will dampen the effectiveness of the research, planning, and strategizing you have done for yourself.
3. Take note of every move you make
Just as chess players take note of the moves they are making, it goes a long way in noting down the actions you are taking during the trading day. With your trading journal, you will be able to maintain your own history of the trading day and identify which moves worked out for you and which are best to avoid. Alternatively, take screenshots of the trade you are making, their entries, targets, and stop loss levels so that you are able to review them at a later time, during the weekend or during the last days of the month.
4. Work on creating muscle memory
Every trade is not the same, and that is why it is essential to practice to develop muscle memory of the strategies that you use. The more you practice the strategies you have learned or created for yourself, the better you will be able to perform (by putting your skills to work) under stress or in a rushed situation. It is essential that you constantly revise the strategies and pay ample attention to identifying roadblocks and working on them.
5. Get to your trading setup with a fresh mindset
Mental clarity and a clear mindset are essential components of being able to make favorable decisions throughout the day. It ensures that you can handle things with intention and are not taking decisions out of guesswork. Meditation, spending time with your loved ones, or exercising are great ways to keep yourself mentally focused and clear. Additionally, setting up your own workstation will also help avoid distractions.
Parting words
Trading calls for mental clarity and having someone who can hold you accountable. By devoting yourself completely to paying attention to every step, you will be able to create a schedule that works best for you. Be sure to revisit your trading journal to identify mistakes and discuss them with your coaches and mentors only. Do not take the opinions of others to drive your decisions and plans. Lastly, take a break after every day’s session to recharge and rejuvenate yourself.
