New year, new you, new investment opportunities. With that said, isn’t it time to reflect on what you did well in 2017 and what you can improve in 2018?
You may have over-traded last year and maybe even rushed your entries. Perhaps you didn’t trade enough and got in too late. In any case, there’s no denying that there’s always room for improvement. In this article, I’ll be sharing three resolutions that could fill in (at least some of) that room for improvement. Whether you’re a rookie or whether you’ve been at it for years, this article has something for you.
DAILY TIME FRAME
Every trader has their own style, and this isn’t a must but let me tell you why you should consider, at least opening, the daily time frame.
Reason number one, things are slower on the daily time frame. As the esteemed Jack Schwager once said – “good trading should be boring.” Matter of fact is, when you’re trading on a slower time frame it gives you more time to receive, process the information and then make a decision without the emotional pressure.
Reason number two, volume is always king! – Especially when talking about technical patterns. I mean, think about it rationally, a daily time frame carries much more data weight than a one-hour time frame. Simply put, there’s much more trading volume in 24 hours than in 1 hour.
Like I said, each trader has their own style but if nothing else just give it a try. It may or may not resonate with you, but matter of fact is if you don’t try it, you’ll never know.
LIMIT YOUR STRATEGIES
Be honest. Were you jumping from strategy to strategy all through 2017? Look, it’s always okay to experiment until you find your style. After all, what you don’t know – you don’t know. One of the most common pitfalls for traders is that they don’t allow their trading techniques to fully play out and deliver the desired results. So, for those still jumping, for those still searching here are some trading styles to give you a head start on your research.
- Swing Trading
- Day Trading
- Price Action Trading
- Position Trading
Once you’ve narrowed it down to your preferred style you can start searching for techniques that compliment your trading style. It’s best to not use too many techniques at the same time so you can keep track of what’s working and what’s not. Maybe two or three at a time? After all think about it, trying to adopt too many styles at once is just inefficient and very often a costly way of learning how to trade.
GOOD MONEY MANAGEMENT
Okay again, I’m going to need you to be honest. How much of your total capital did you risk with each trade in 2017? 20%? 30%? Wait, did you even calculate your risk? It’s a binary answer – you either did or you didn’t.
So how can you improve your money management technique in 2018? If you stick to this one rule, you should be alright. Diversifying your capital is always a good thing – after all who puts all their eggs in one basket? So, to sum up, your priority should be protecting your capital!
Shift your focus from the end result (the profits) to the process and 2018 might turn out to be your best year yet.
Disclaimer: This article is for educational and informative purposes only and should not be considered as investment or trading advice.