Daily Self-Analysis as a Trader
Daily Self-Analysis. Successful trading is 40% risk control and 60% self-control. In turn, the risk control portion is one half money management and one half market analysis? Thus, market analysis is only about 20% of successful trading. Yet most
traders emphasize market analysis while avoiding self-control and de-emphasizing risk control. To become successful, traders need to invert their priorities.
Daily Self-Analysis as a Trader involves human performance, and that performance can be objectively measured in terms of profits and losses. You can’t hide from your performance record. Your performance is either profitable, break-even, or losing. Since are the most important
factor in your performance, doesn’t it make sense to spend time analyzing yourself? The best traders do it subconsciously. You will probably be one step ahead of them if you make a conscious effort to begin each day with self-analysis.
Stress, or anything that detracts from your performance such as a cold or illness, are going to impact upon your trading. What if your normal performance is break-even and you have a cold which reduces your performance ? Suddenly, you’re going to start losing money. Even if your typical performance is profitable, if some stress reduces it by low, then you might find yourself at break even or losing money. As a result, you are better off staying away from trading until you eliminate the stress from your life.
Yet if you don’t spend some time analyzing yourself prior to trading, then you are likely to trade out of habit. And if you do trade under these circumstances, then you’ll wonder why you suddenly start losing. Numerous people find that their best trades are
the hardest trades to take. You generally go against the crowd in the best trades. As a result, when most people believe you are wrong with enough conviction to be in the market, and you’re around a lot of them, it’s very hard to go against them. As a result, people who trade in a crowd perceive their good trades to be “hard trades.” Let’s assume that for you the hard trades are the big winners. How do you know if a trade is hard, or whether you are simply not in the mood to trade? You don’t. Self-analysis allows you to distinguish between the “hard” trade and those times when you make the trade seem hard.
Daily Self-Analysis as a Trader, when practiced regularly, can make an immense difference in your trading. If you do it, we think you will be amazed at the improvement in your trading results.