Tag Archives: Trading Business

Trade Less; Review More!

 

Day Traders

If you're not currently profitable, or achieving the level of success you wish to achieve…

Is your current situation something like this?

Trade Less Review More

WRONG! WRONG! WRONG!

I know there is a LOT to be learnt through live trading. But it's the review process which drives growth and development.

You'll see things during a review session, after the fact and away from the emotion, which were not visible in the live market.

You'll discover things within your stats, which were not visible in the live market.

If you want to progress, time for an effective review session is NOT negotiable.

You must make a choice.

You either HAVE TO cut something from the time outside of trading, to allow for an effective review session and ongoing learning.

Trade Less Review More

Or you have to cut your trading…

Trade Less Review More

Trade Less Review More

Longer Timeframe Traders

The same applies to you.

If you're not currently profitable, or achieving the level of success that you wish to achieve…

Is your current situation something like this?

Trade Less Review More

If you want to progress, time for an effective review sessions is NOT negotiable.

You must make a choice.

You either HAVE TO cut something from the time outside of trading, to allow for an effective review session and ongoing learning.

Trade Less Review More

Or you have to cut your trading…

Trade Less Review More

We all want to trade more.

But if you're not yet consistently profitable, or not yet achieving the standards of success you believe you are capable of achieving, then your priority must be ensuring an effective review process as well as time for learning, testing and development.

You can always trade full-time again in the future.

But for now, less is more.

Trade less. Review more.

Happy trading,

Lance Beggs

 


 

Seeing the Market in New Ways

 

An amateur and a professional trader can look at the same price charts and see completely different things.

The difference is not as simple as the professional having a better strategy, but rather that they have superior mental models and belief systems.

They see the market in ways that the new trader cannot yet comprehend.

A lot of my writing has been with the intent of helping shift the way you view markets and price movement.

A key goal with the YTC Price Action Trader was to help you see this trading game in a superior way; playing the metagame rather than the usual pattern-based game that most play.

  • Seeing the charts from the perspective of "traders making trading decisions" rather than just as somewhat random price movement.
  • Feeling the hope and fear within the other traders; especially at the point where they get trapped in a low probability position.
  • And using this information to profit from their loss.

 

The obvious section to reference is the whole of Chapter Two, but the concept underlies all the material which follows through chapters three to six.

Much of the last eight years of the YTC article archives was also devoted to helping you see things in new ways.

Just recently there has been a focus on the following:

 

And a key aim with the upcoming video course will be redefining how you apply deliberate practice principles to drive your growth and development. A recent insight led to a new level of understanding that has completely shifted the way I manage my own progression. I can't wait to share it. More on that later.

Until then though, let's see if you can trigger your own paradigm-shift!

I'd like you to consider the idea that maybe your next improvement in results will not come from a new system, or some new knowledge, but rather from changing perspective and learning to see some particular aspect of this business in a new way.

It's not easy. You can't force new insights. They typically come at unexpected times.

And they often need a trigger to shift your perspective and open up a whole new world of possibilities.

The good news… there is one method that can help provide this trigger… assuming you do have the required foundation of knowledge and experience.

Schedule some time to question your beliefs and assumptions.

You may find they're quite valid. But you may also find a new way forward.

You may find that something you held to be true, is perhaps not 100% certain. 

Time spent questioning your beliefs or your assumptions, is NEVER time wasted.

Consider the following areas of your trading business:

  • Your understanding of how and why price moves.
  • Your understanding of how and why you expect to profit from price movement.
  • Your reasons for market and instrument selection.
  • Your personal routines for achieving and maintaining a peak performance state.
  • Your routines for pre-session preparation.
  • Your method of position sizing.
  • Your method of assessing market conditions and selecting appropriate tactics for those conditions.
  • Your method for rapid recognition of a change in market conditions and adjustment of tactics to suit the changes.
  • Your method for real-time contextual reading of market bias.
  • Your method of identifying trade opportunity.
  • Your method of entry.
  • Your method of risk management.
  • Your method of trade management.
  • Your method of trade exit.
  • Your routines for post-session review.
  • Your routines for longer-term review… and the way you use this to drive further growth and development.
  • Your routines for ongoing personal and professional development.

 

For each of these areas of your business, question your beliefs:

  • What are your beliefs about this aspect of your business?
  • Why do you have this belief?
  • Is there evidence to support this belief?
  • Is there evidence which suggests that it's wrong? Or incomplete?
  • Is it possible that this belief is only valid in a certain context? Only in particular times, or places on the chart, rather than being an always 100% certainty?
  • Imagine a professional trader who has mastered this aspect of the business. Are they likely to operate with the same belief? If not, what would they have to believe in order to operate more effectively?
  • Can you adopt this new belief? What can you do to test this new belief for validity? What actions can you take on a regular basis to reinforce this new belief and instil it into your daily habits and routines?

 

Time spent questioning your beliefs or your assumptions, is NEVER time wasted.

Schedule some time this weekend to question your beliefs.

All the best,

Lance Beggs

 

PS. YTC Price Action Traders: If you need a new way to "question" price movement at the hard right edge of the screen, try the questions listed in section 3.9, on page 209 of Volume 2.

 


 

Time Management for Traders

 

Here's a great question I received via private message on Facebook during the week, which I think is relevant to all of us.

What time management approach do I use?

I'll make an assumption here that the intent is to talk about how to fit trading into "life". That is, how to find sufficient time for not only trading, but all the admin pre and post-session, plus the never-ending tasks of personal and professional learning and development.

Yeah… there is a lot to do.

There are no shortage of supposedly effective time management systems. These are two of the major systems I've tried over the years, both of which have a big following. But there are no shortage of others if you feel like searching Google for "time management". 

 

So what system do I use?

None of them!

Whenever I implement a comprehensive system for managing my time, I end up spending too much time working and managing the system, rather than doing productive work.

But hey… maybe that's just me?

There are millions of people around the world who swear by these type of systems. Give them a try. Just because I didn't find them effective, doesn't mean you won't get great value out of them.

So what do I do then? Let's call it a "Time Management Non-System". I have general themes in life; things that are important to me. Family, trading, YTC, personal and spiritual growth & development, and a bunch of other stuff. And I just work on whatever I feel most motivated to work on at any particular time.

It's perhaps not as efficient as the above "systems". But it works for me.

Now… here's the important bit though, which was my motivation for sharing this via an article rather than just a private message reply.

Whether you operate with GTD or Agile or the "YTC Time Management Non-System", there is a foundation that needs to be in place first. It is the key that ensures you not only find time for all your trading activities, but that you also make maximum effective use of this time.

Without this foundation, you're wasting your time (pun intended!).

What really matters is NOT how you prioritise all your competing tasks and schedule them across your limited calendar.

Instead, what matters is how productive you are with the time you spend on each of your tasks.

Ultimately we are not managing time, but rather managing ourselves and how well we are able to apply ourselves to the task at hand.

And we do that by managing our ENERGY and our MOTIVATION.

Perfect prioritisation and scheduling of tasks is pointless if you don't have the energy to make productive use of the time.

Perfect prioritisation and scheduling of tasks is pointless if you don't have the motivation to work efficiently and effectively on the task.

Energy – Keep fit and healthy, in mind, body and soul. Sleep well. Keep hydrated. Eat healthy foods. Exercise. Maintain good relationships.

Motivation – Fill your life with reminders as to the "WHY" that drives all your efforts towards trading success.

If you lack energy and motivation, it doesn't matter what task you allocate to a particular block of time. It will be poorly executed.

But if you have high energy and are bursting with motivation, you'll ensure efficient and effective use of your time.

So if you wish to be effective in completing all daily trading routines and also allowing time for personal and professional development, then work to first ensure high energy levels, and do ALL YOU CAN to ensure massive motivation towards your trading goals.

The task for you now, if you haven't already done so, is to spend some time thinking about how you can improve your life in terms of both ENERGY and MOTIVATION FOR TRADING.

Because I don't believe it matters which time management system you ultimately choose to use. Or even if you choose to live without one. If you are highly energised and motivated, you'll not only find the time needed to work on your trading, but you'll also quite likely be unstoppable.

Just do it!

Lance Beggs

 

PS. None of these ideas are mine. I don't know where they originally came from, but if you do Google "time management" you'll surely find people discussing these ideas as well. There is a lot of great material out there on productivity. Schedule some time to study the topic and to experiment with different approaches till you find the one that best works for you.  🙂

 


 

It’s Time to Fight to Get to the Next Level – Examples

 

Last week we added some structure to our growth and development as a trader, exploring how we could use our review process to drive our progress along the development pathway.

Check it out here if you missed it – http://yourtradingcoach.com/trading-business/its-time-to-fight-to-get-to-the-next-level/

It's Time to Fight to Get to the Next Level

The summary version of the plan was as follows:

(1) Find where you currently reside on the above pathway.

(2) Determine the Win%, Loss%, Average Win and Average Loss stats for your most recent trades (20 trade group… minimum).

(3) Identify the next level you hope to achieve.

(4) Determine how your step (2) stats will need to change in order to place you within the next level of the pathway.

(5) Immerse yourself into a review of the trades making up your most recent sample, to identify the reasons for failing to achieve the required statistical outcome, and the changes necessary to take you to that next level.

(6) Implement the changes and apply them as you trade your next group of trades (20 trade group… minimum).

(7) Repeat

 

Let's work through a couple of hypothetical examples, in order to make the process clearer.

Example 1:

(1) Find where you currently reside on the pathway.

You already know this. You're stuck at the very first stage. Sim trading with spot forex mini-lots… and still losing. Not losing badly mind you. But just slowly grinding your way to a smaller and smaller account.

No problems. That's absolutely fine. We all start there and build our way higher.

First things first though, you recognise that you need to quantify the problem and get some useable stats. So you document your plan as best you can and complete a sample of 20 trades.

The P&L clearly shows a negative result, down 100 pips ($100) over the sample of trades. So yes… it's confirmed… we're in stage one. It's all upside from here! 🙂

(2) Determine the Win%, Loss%, Average Win and Average Loss stats for your most recent trades.

Let's examine the stats a little closer though.

Win% = 55%

Loss% = 45%

Average win = 10.91

Average loss = -24.44

Expectancy = (Win% x Average Win) – (Loss% x Average Loss)

Expectancy = (0.55 x 10.91) – (0.45 x 24.4) = -4.98

You're losing almost five dollars per trade!

Ok this is not the end of the world. This is something you can work with.

(3) Identify the next level you hope to achieve.

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It’s Time to Fight to Get to the Next Level

 

Feedback from a recent article has been so incredibly positive, with a number of emails coming through saying that this was EXACTLY what these people needed to hear right now. It seems one of the most popular articles of the last 12 months.

Check it out here if you missed it – Are You Closer To Profitability Than You Thought?

So let's explore an idea expressed in my favourite line of the article.

And that's the following:

  • "… right now it's time to end the mediocrity. It's time to fight to get to the next level."

There are various levels to pass through on the way to consistent and increasing profitability.

It's Time to Fight to Get to the Next Level

For most of us, there are no short cuts!

There are no Game Cheats that can jump you straight to the end goal.

It's Time to Fight to Get to the Next Level

It's a step by step process of growth and development.

It's Time to Fight to Get to the Next Level

Progress will be slowed (or completely non-existent) if you're plan for progression is unstructured and random.

Here's how to provide some structure.

(1) Find where you currently reside on the above pathway.

Look at results over a recent sample of trades. What you did three years ago is irrelevant. We want to see what you're achieving NOW.

Take a recent sample… 20 trades minimum. And look at the P&L. Where does that place you on the above pathway? (Note: the sample chosen must also represent "typical" current results. If you fluked a massive winner through poor practice (and if you're honest with yourself you'll know if you did that) then exclude that trade. You'll only be cheating yourself if you include it.)

Wherever you are… accept it. There's no point denying it. This is your starting place. You build from here.

(2) Determine the Win%, Loss%, Average Win and Average Loss stats for your most recent trades (20 trade group… minimum).

If you don't have sufficient stats to determine these… you need to keep better stats. Start again with a new 20 trade group and keep better stats.

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There Are Days When You Should Not Trade

 

Last Monday was the US Labor Day public holiday.

So I was surprised to see an email on Tuesday from a trader who was caught unaware by the low volume.

Here's an excerpt from the email:

  • "Today was some USA holidays (I did not even know it) and most of the markets were completely dead and made small range during whole day."

 

You absolutely MUST be aware of the holiday schedule, as it relates to your market.

Any decent economic calendar should show them.

I use this one (due to my trading journey coming through the forex markets a few years back) – http://www.forexfactory.com/calendar.php. It's not the only one. Search around for some alternates and find the one that best suits your market and your circumstances.

It's a holiday... take a long weekend.

Some people like to trade every day. That's cool. We all get to make our own decisions; and alongside that have to accept responsibility for the outcome. If you're net profitable on holiday sessions… good on you. I just don't think the risk is worth the effort.

There are days when you should NOT trade.

For me, these days are:

  • All US holidays
  • Any other holiday relevant to the instrument being traded (eg. UK holidays for GBP/USD)

 

And there are days when you should trade cautiously (and even consider not trading). For me these are:

  • A couple of hours prior to any significant news release (such as NFP or FOMC… or market specific releases such as the Crude Oil Inventories report for CL)
  • The day before holidays or long-weekends (or at least just the afternoon of these sessions)
  • Rollover day (for futures)

 

There may be others applicable to your markets. Options expiry days are one that some people avoid.

Take some time out this weekend to update your trading plan to (a) check the economic calendar on the weekend (for the upcoming week) and again pre-session (for the upcoming session), and (b) document which days you will avoid, and which you will trade cautiously.

Happy trading (or not… on certain lower probability days),

Lance Beggs

 


 

Are You Closer To Profitability Than You Thought?

 

If you've been trading for quite a while and seem to be stuck, consider the possibility that the next stage in your journey may not require further knowledge or skill development.

Instead, maybe it requires CUTTING POOR PRACTICE from your business?

Do you know what will happen if you cut areas of underperformance from your business? You'll be left only with areas of best performance. Areas of current best practice. Areas which you already manage well. Areas which, if enhanced even further, may be sufficient to transform your business and take your results to the next level.

Look within your stats and your journals. Find where you currently perform best. And focus exclusively on that area of your business.

Look within your stats and your journals. Find where you perform poorly. And cut it from your business. Implement procedures or controls to avoid it, or to mitigate the risk.

Do you struggle with a strong trend due to a tendency to always try to fade the trend? Stop promising yourself that "Damn it… Next time I'll just trade with-trend!" You know that you won't. If you could, you already would. You've promised yourself that you would do that too many times already. Focus instead on identifying those conditions in which you outperform… perhaps ranging action or slow and stable trends… and ONLY TRADE AT THESE TIMES. Develop rules for quick recognition of suitable trading conditions, and to alert you to those times when you should just walk away. Specialise in ranging market conditions. Or specialise in slow and stable trends. Whatever works best for you! But recognise and avoid the strong, fast trends if they're destroying your edge.

Do you struggle in choppy, sideways price action but outperform in directional markets? Identify structural features that suggest initiation of a new trend. Wait for these to develop… confirm the trending action… and engage the market. But otherwise, stand aside.

Do you underperform in volatile conditions? Measure market volatility and stand aside when it reaches these higher levels.

Do you underperform in markets suffering low levels of volatility? Again, measure market volatility and only trade at times when the market is moving.

Do you struggle in conditions of low liquidity? Stop trading markets or times which suffer from low liquidity.

Do you find yourself underperforming in slow and thick market conditions with high overlap between price bars? Then implement some method of identifying and trading only when price has some directional conviction and is flowing smoothly.

Do you struggle in timing tests of support or resistance, when price turns just before the level? Then forget about them. Cut them out of your business. Don't trade unless price breaks the level, focusing solely on breakout failures or breakout pullbacks.

Are pullback entries destroying your edge, when there is no structure to lean against? Then only trade a pullback when it moves into areas of prior structure (swing highs or lows). Or require that it develops it's own structure first before considering pullback entry. Only enter when you have some level to lean against.

Do you trade multiple strategies? Is one underperforming? Cut it. Focus on what is working best.

Do you trade one strategy across multiple timeframes? Perhaps a "daily chart" strategy alongside intraday swing trading? Is one destroying your profitability? Cut it. Focus on what is adding the most to your profitability.

Do you trade multiple markets and find that some only contribute breakeven results AT BEST. Cut them. Focus on those that you read the best.

Do you have a tendency to often give back profits during the afternoon? Stop trading at midday! Or set a session P&L trailing stop.

Are the opening sequences consistently putting you in a hole, requiring that you spend the next couple of hours fighting just to get P&L back into the green? Then stand aside at the open. Let the market create some structure first.

You don't have to do it all. Cut areas of underperformance. Or if not possible, then work to limit their impact.

And work to specialise in areas of your current strengths.

Is there one setup in which you perform the best? What could happen if you focused exclusively on that setup for the next few months?

Is there one type of environment in which you perform the best? What could happen if you focused exclusively on that environment for the next few months?

You may be thinking, "But won't this seriously limit the number of trades I take?"

So what!

Are you here for lots of trading action? Or are you here to become a trader?

Look within your stats and your journals.

Find where you perform best.

Cut the rest and FOCUS only on developing and enhancing that which you already do best.

You can always address the areas of poor performance later, if you choose to do so.

But right now it's time to end the mediocrity. It's time to fight to get to the next level.

Cut what's not working. And focus only on areas of current best practice.

Perhaps you are closer to profitability than you thought?

Happy trading,

Lance Beggs

 


Improving Focus – The Essential First Step

 

For the last year or so my trading computer has been on a desk just to the left of my work computer.

This has been fine except during quiet periods of price movement, when I've often found myself tempted by the work computer. All I have to do is turn to the right and it's within reach.

"I'll just check emails or facebook. It'll only take a second!"

Usually this is fine but occasionally I'll become so absorbed in whatever I'm looking at that I don't realise five or more minutes has passed without watching price.

The good news is that there was a simple fix, which has allowed me to maintain focus on price. I'll get to the solution just below. But let's talk in general terms first, because the solution works for many other causes of loss of focus.

How do you maintain optimal focus in a world full of distractions?

How do you maintain optimal focus in a world full of distractions?

The internet will provide many exercises on willpower and mindfulness, which should help with any focus issues you may have. These are great. But they're not the first step.

The first step is not to work on your focus. The solution is much simpler.

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Don’t Break the Chain – A Simple Tool to Improve Consistency

Successful traders do a lot of work away from the charts.

Over the last five years I've been asking you to join their ranks.

I've asked you to create and use a Market Structure Journal – http://www.yourtradingcoach.com/products/ebooks/the-greatest-trading-book-ever.pdf

For YTC Price Action Trader readers, I've expanded that to include a Motivation Journal, a Lessons Learnt Journal and a Trades Journal – http://www.ytcpriceactiontrader.com/

I've asked you to approach your pre-session routines in a professional manner – http://yourtradingcoach.com/trading-business/my-pre-session-routine/

I've asked you to approach your post-session routines in a professional manner – http://yourtradingcoach.com/trading-business/my-post-session-routine/

I've asked you to drive your learning and development through the use of targeted monthly, weekly and daily focus goals – http://yourtradingcoach.com/trading-business/3-simple-steps-to-accelerate-your-learning/

I'll be the first to admit that this is a whole lot of work. But the fact remains… it's essential if you want to improve.

So for those of you who struggle to maintain consistency in your process and routines, the following tool may help.

** Click on the image to open or download a larger PDF copy. Be sure to save it!

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