The 4 Hallmarks Of High-Performance Trading
You can't succeed without them
To trade well you need to feel good emotionally.
But to feel good emotionally you need to trade well.
Traders are aware of the first one but forget about the latter.
The best way to maintain a healthy state of mind in and outside the charts is to trade well. This means being at peace with the way you performed.
In this article, I define the 4 essential qualities your trading practice needs for you to achieve high levels of performance.
1. Planning
High-quality trading requires planning.
Many traders have a clear plan to enter the market but a lack of planning to manage the trade and exit.
Some of these traders are so worried about being active in the market that they end up missing the most important part of the trade: its management.
It is possible to turn a trade with a poor entry into a good trade with effective trade management.
More difficultly, however, is to save a trade with a great entry but sloppy trade management.
Planning a trade is not only to know when you should be in the market but about knowing the indicators that tell you whether the trade is working out or not. With this information, you can manage your trades efficiently: adding to the position when it’s worth it and exiting when it’s losing power.
2. Consistency
Consistent results are a consequence of consistent execution.
Too often, I see traders setting big goals in a short period of time. They want to fix their problems as soon as possible so they may write in their journals things like:
“Stop hesitating on pulling the trigger for the next week”
“Be disciplined and take all the high-quality setups”
“Be more patient next week”.
Although these seem to be legit goals they fail to address the root of the problem. The mistake itself is a mere consequence of something bigger which makes intensity an inefficient approach to solving any trading problem.
Consistency is what will make the difference: Recognizing the cause of your mistakes and setting clear achievable goals each week, based on your progress of the previous one. Wanting to solve your struggles all at once is impossible.
Ask yourself: Will I be able to maintain this routine for the next year? If your answer is “no” then simplify, keep the essentials, and focus on repeating that routine day in and day out!
3. Focus & Peace
In the beginning, you think making money is the goal.
Later you realize the goal is to make money with one condition: peaceful and detached trading, offering no resistance to the market and trading in a purely reactive way.
If you feel emotionally drained after your trading sessions and you have difficulties sleeping at night thinking about your performance of that day, is it really worth it? Why did you start trading in the first place?
Quality trading it’s not all about the results but about the performance that produces them.
So remember before every trading session that when you trade out of focus you’re not only putting at risk your money but your mental capital, which partly involves your self-esteem, self-image, and self-talk.
Mindfulness is an essential component of trading.
4. Adapting
What will make you thrive and reach new heights of performance is knowing how to adapt.
When you notice your strategy isn’t trading the way it used to you need to be open-minded to adapt it under the market circumstances.
Adaptation only comes with awareness and acceptance.
Taking realizations about the market, your strategy, and yourself by the end of each session helps you build the awareness needed to adjust your performance toward the market.
These small changes are what make your strategy and you survive the different market cycles.
On the other hand, each trade you take requires you to be adaptable also which means you are not attached to a view or a bias of what price might do.
You open yourself to all the possibilities of the market and are willing to change your view as quickly as the information the market offers you.
To evaluate the level of attachment you have to a trading idea, or in a certain event, try to argue against your view.
Final Words
A great way to evaluate your performance is to rate each trade on the 4 criteria above:
Planning
Consistency
Focus & Peace
Adaptation
After a month of evaluation, you have clear feedback that puts you in the right direction.
If you can plan your trades, be consistent with your routines, hold an open mind for adaptation, and feed focus and peaceful trading, there’s no reason to not succeed.
With love,
Sara
Whenever you’re ready, there are two ways I can help you:
1- Spot and eradicate your worst trading mistakes with my E-Book here
2- Elevate your trading performance with The Peak Performance Trading Program (one-on-one). Fill out the qualification form here.
Will I be able to maintain this routine that’s a great question to ask. Great four points. P-C-F-A like P-a-C-i-F-ic-A-tion. And it applies to any goal in life someone wants to achieve