Three Ideas to Increase Your Trading Edge

Gain real-time advantage by gathering new and effective ideas from peer partners in the trading industry. It’s a vital resource for those striving to improve their outcomes.

Here are three ideas we shared with a group of clients during one of our ‘Peer Partners’ sessions. Those who not only implemented the ideas but also modified them to fit their trading reported that they proved to be very help to their trading processes.

As with everything we publish, we offer these ideas to stimulate your thinking and come-up with ever-greater ideas—not tell you what to do.

Here are the three ideas:

Develop a pre-session warm-up routine that works for you and then develop it into a habit.

Use dual trading platforms to help overcome hesitation and have accurate data to support trade ideas.

Create a custom Slide Show to use as part of your deliberate practice process.

Idea #1: Develop a pre-session warm-up routine that works for you and then develop it into a habit.

Warm-ups are key. The biggest names in sports perform warm-up exercises before they take the field.

Warm-ups. Whether physical or mental or both, prepare you physically, mentally and emotionally for your upcoming trading session to the degree you invest your time and energy into the process. The more you practice your focused, the more your strengthen your warm-up as a habit. And, having a strong warm-up habit builds new neural pathways that can help you gain the most from your performance.

Typically, most traders ‘warm-up’ for a trading session by reviewing past and current market information and activity prior to the opening bell.
While we agree those activities are important to one’s trading, we also believe it is important to physically, mentally, and emotionally prepare yourself for the demands of the open as well as the unfolding or developing session.

Some activities to consider adding to your pre-open checklist are:

Physically – Invest 5 to 15 minutes in a brisk walk or your favorite aerobic or resistance exercise to increase your blood circulation and ‘shake out’ the cobwebs from overnight.

Mentally – Replay two previous trading sessions at a replay speed that works for you. Replay #1 being a random past trading session and Replay #2 being the previous trading session. The objective, to help you ‘get back in the game’.

Emotionally – Using the previous session replays, review what worked and didn’t work in the previous session. Next, think about what you discovered from the replays now that you’ve been removed from it by ‘X’ hours and the emotion has subsided. And, then add the lesson or lessons learned to your Lessons Learned Queue and address them according to your Learning Plan.

The benefit of a focused warm-up session is that your three primary factors of fitness; body, mind, and emotions, are addressed and brought together to help you have your best trading session ever.

Idea #2: Use dual trading platforms to help overcome hesitation and have accurate data to support trade ideas.

In talking with clients and both subscribers, one point that comes up frequently is on how to get better trade location on entering the market. While we leave the teaching of how to identify ideal trade location to trading educators we want to share an idea that has helped others reduce hesitation and gain confidence.

The idea is to open two order entry platforms for your trading session.

Platform A for real money trading when you feel totally confident that your pattern and/or setup meets your pre-defined entry requirements.

Platform B for simulated trades when you feel somewhat positive about a pattern and/or setup but not confident enough to trade with real money for whatever reason.

Then, once you have both open. If a setup totally meets your criteria and you feel positive about the trade, you execute it as you would normally. On the other hand, it meets your criteria for a qualified setup yet is missing one or so key conditions but you still feel positive about it but not to the extent of risking real money, you execute it on the Simulator.

Why? Because when we mentally execute and track a trade or make notes on a sheet of paper, we are, in most cases, only fooling ourselves because:

we assume we were filled,
we assume our position management is really good since we tend to only look at where the market went and not how it got there, and
that we’re filled at or near the extreme of the move.

Here are a few ways this simple trading setup can potentially help you:

Trading on the simulator when you’re not completely confident of the pattern and/or setup affords you the ability to review the trade and determine if and where you would have been filled on your entry as well as your stop and target placements.

Actually determine whether there was something your subconscious knew that you weren’t aware of.

See places where you methodology is working as expected or not without the pressure of real money on the line. Reviewing your simulated trades can help you recognize these events. There may be trades that didn’t meet your specific entry criteria, but could nevertheless potentially be incorporated into your trading methodology.

Also, when it comes to confidence and hesitation, Brett Steenbarger wrote a two-part post on the subjects:

Part 1: When Traders Lose Confidence – Gaining Perspective

Part 2: When Traders Lose Confidence – Changing Your Self-Talk

Idea #3: Create a custom Slide Show to use as part of your deliberate practice process.

This final idea is simple but powerful. Collect 40 to 50 screenshots of your ideal patterns and/or setups. Create a simple PowerPoint presentation with each screenshot on a separate slide. Configure the Slide Show function to change slides every ‘X’ seconds. To view, activate the Slide Show functionality. Or, print them out and staple them together so you can review them when you’re waiting for someone or have a few minutes unscheduled.

The purpose of an exercise like this is two-fold:

First, get to the point where the pattern or setup configuration is almost second-nature to you, and

Second, increase your ability to notice subtleties in the patterns and/or setups that deserve more study.

Until next time . . .

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