Here we are at year’s end again, and it’s time to stop trading for a bit and reflect on our past year’s trading performance. This means it’s time to get honest with yourself…how did you fare last year in the markets? Can you honestly say you put forth your best effort at being a disciplined and logical trader or did you behave more like someone on a 1 year gambling binge in Las Vegas? Either way, it’s time to get ready for the New Year and take advantage of the psychological “clean slate” that comes with it. Every trader knows their main weaknesses, so when writing our New Year’s trading resolutions and affirmations, don’t be afraid to focus on your weak points and bring them to the surface. Don’t sugar-coat this; everyone has weaknesses when it comes to trading and if you don’t face them head-on you will never strengthen them. Here are 5 trading resolutions for 2013 to get you started; you can add some more of your own to give yourself a nice list of achievable trading goals for the New Year:
1) I will aim to be a better person in general
“I will become a better all-around person and this will directly benefit my trading.”
I’ll admit it, this first point isn’t just related to trading, it applies to life in general; it could apply to relationships, your job, business, or even to your studies if you’re a student. One reason why most people don’t achieve their New Year’s resolutions is because they get bogged down doing things that are really just a waste of time. Many people have a hard time making efficient and effective use of their time. Many people struggle when it comes to seeing things through from start to finish, especially when it comes to things they aren’t necessarily “forced” to do like when you’re at work and your boss is watching you.
Things such as reading a book from cover to cover, planning and going on a holiday, spending more time with the kids or just keeping the house clean can end up being things that rarely get accomplished for many people. You need to promise yourself that you will improve yourself this year by getting all the “little things” done that you know you could accomplish if you just stopped wasting time on Facebook or watching too much T.V. Once you begin to get everything done in your life on time, it will automatically reinforce a lot of positivity in your life and this will naturally be reflected in your trading results. I want you to pick maybe 5 core aspects of your life or personality that you want to tweak and improve this year and really work on them. Once you begin to get all these basic / core personality traits and daily habits in-line, your trading will be much more likely to “click” into place and you’ll have a clearer conscious and more motivation.
The secret to becoming a better person and trader is to keep the flow of positive thinking and positive habits going…it can be difficult to get back into the gym regularly or back filling out your trading journal regularly, but it’s simply “getting up on the horse” that is usually the hardest part. Once you get going on the right track you start to develop positive habits, and these habits will reinforce themselves in your brain the more you stick with them, creating confidence and making it more likely that you continue to stay on track and get closer to your trading goals or other life goals.
2) I will stick with my trading method
“In 2013 I am going to stick with price action trading and not deviate from this method.”
Jumping from method to method or system to system is a big reason many traders struggle to make money in the markets. You need to commit to one method this year and stick with it, through the good times and bad. Commit yourself to 12 months of continued study of price action trading, follow the teachings in my trading course and daily commentary and fine-tune your own personal price action trading skill. You need to give it a real crack, even in the face of hardship, account draw downs or low confidence…you have to commit to getting back up on the “horse” and keep going. Every method or system is going to have losing trades…it’s part of trading, you can’t give up every time you have two or three losers in a row.
One proven method that will help you stick to price action trading is to decide to focus on one price action setup at a time and really master it. If you’re a new or struggling price action trader you should read my article from last week on How to Profit with Price Action and follow what I say in it. An excellent New Year’s resolution to get your trading on the right track would be to become a “specialist” of one price action setup at a time. Even if it takes you all of 2013 to accomplish this, you have to ask yourself if that would be an improvement over your 2012 trading performance or not, I’m willing to bet it would be.
3) I will limit my trading screen time to 1 hour per day
“I’m aware that the more I look at my charts the more likely I am to make bad trading decisions”
Most losing traders tend to spend way too much time looking at their charts, trying to find trades and reading economic news. If you take my simplified approach to analyzing and trading the markets with price action on higher time frames, you’ll be able to quickly scan the markets for your price action setups, you’ll save a lot of time and money by not over-trading and hopefully increase your win rate.
Your resolution could be to limit screen time to 1 hour per day, you can divide up that hour however you choose; two 30 minute sessions or four 15 minute sessions, etc. Whilst screen time is essential for learning how to trade, too much of it can be counter-productive afterwards, and spending increasing amounts of time analyzing your charts will eventually “hypnotize” you into finding trades that aren’t really valid instances of your trading edge.
Limiting your screen time like this will eliminate most second-guessing and allow you to make cleaner and crisper trading decisions. It will also leave you more time to do other stuff like spend time with your family or focus more on your day job. It’s ironic that it tends to be the people who spend the least amount of time watching the markets tend to make the most money, at least that’s the feedback I’ve got from dealing with over 8,000 traders since 2008.
4) I will become a “minimalist” thinker
“I will think less, I will analyze less, I will do less in all aspects of my trading; I will aim to keep it simple”
Minimalism is like its own religion for some people; they choose to live as minimalists, while this lifestyle won’t be practical for everyone, we definitely need to trade as minimalists…This includes removing indicators and “clutter” from your charts which only clouds decision making, and generally just taking a “minimalist” approach in all aspects of your trading. We want to abide by a basic set of principles and logic that does not complicate the trading process, price action trading fits that mold perfectly.
I recently wrote an article about my journey of becoming a minimalist in all aspects of my life, and I actually took the idea from the way that I trade; minimally. It seems as though humans have an innate tendency to over-complicate things, from relationships to trading this seems to be the case. Thus, in 2013 one of your main resolutions should be to become a “minimalist trader”. You can do this by sticking to the simple price action trading strategies that I teach, higher time frame trading, and reducing the amount of time you actually focus on analyzing and trading the markets. This minimalist trading approach is something that dramatically improved my personal trading performance and later my everyday life as I got rid of unnecessary possessions and ‘streamlined’ my life.
5) I will read my daily trading affirmations
“I have written my daily trading affirmations and I will read them to myself each morning and night”
What’s a trading affirmation you ask? I actually wrote a good article on this earlier this year, check it out here: Daily trading affirmations. You might want to use some of the affirmations in that article as well as some of your own and write out your own daily trading affirmations list that you read every day before you trade.
Reading affirmations to yourself each day before you look at the markets can be an excellent way to keep you focused and on-track. A big part of becoming a successful trader is just remembering that trading is a marathon not a sprint, and to act accordingly. It can be very easy to fall off the right track and start “trading like a machine gunner”, so having a daily reminder to yourself of what you need to do to achieve success, can be a big help.
So how do I accomplish my 2013 trading resolutions?
Whilst the title of this article might be “New Year’s” Trading Resolutions, it might have been better to title it “Daily” Trading Resolutions, because let’s face it, a year is a hell of a long time. The above points might seem like a small mountain for you to conquer, but to be honest, you shouldn’t aim to accomplish them all on January 1st. You should take the month of January to get everything ironed out; write down your trading goals, chop them up into bite size pieces that you can easily accomplish and workout all the details of your trading plan. You’ve probably been trading on the back of some very bad habits for the last year or longer, so those bad habits are going to take some time and conscious effort on your behalf to get rid of. You need to map out your trading plan for 2013 in January, take some time over the next month and actually figure out what you need to do to accomplish your trading goals this year. If you’re serious about this article guys, get out a pen and paper and write out a list of “promises” to yourself and sign it, hell laminate the thing and tape it to your bathroom door if you have to…whatever it takes so that you see it and read it every day!
Your longer-term goal of becoming a consistently profitable trader will only be achieved if you do the right things each day, week and month. That means doing all the things we’ve discussed so far like focusing on one setup at a time and really mastering it, recording all trades in your trading journal and generally just being organized and disciplined in your trading approach. Most traders get too overwhelmed with all this stuff and so they sort of jut “give up” before they even get started because it seems easier to just gamble their money in the markets and get lucky. I can promise you that if you just take it one day at a time and work on overcoming your own temptations of trading when you know you shouldn’t and risking more than you know you should, at year’s end all of those days and months of behaving disciplined and logically will add up to a consistent and profitable year.
Before I sign off today, let me just say it’s been a pleasure writing these articles for all my followers this past year and I sincerely hope I have helped many of you. I look forward to helping you guys even more in 2013 and I’ve got some exciting things planned for members and non-members alike.