Trading Problems - Maintaining Focus
I once heard a statement by Rebecca Fine of www.scienceofgettingrich.net that says something along the lines of “If what you’re thinking about isn’t something that you want to have happen in the next three minutes… get rid of the thought and think something else.”
While that’s a great way to live your whole life, and I certainly try to do so, it equally applies to the process of trading, specifically ensuring that we maintain focus during the conduct of our analysis.
Maintaining focus can be difficult. Not only will you face distractions from external sources, such as the phone ringing right during a prime setup, or your partner asking for a lightbulb to be changed, or your children asking for help with their homework, but you also face internal distractions from your negative fear-based trading mindset. These internal distractions may be less obvious to the novice trader, but the results can be devastating for your profitability.
If you have not yet mastered your negative fear-based trading psychology, then you are going to face never ending distractions that divert your focus from the job at hand - consistent implementation of your trading plan.
Regardless of how these fears manifest within your trading - complacency, boredom, doubt, procrastination, denial - they will lead only to inconsistent and unprofessional application of your trading plan. And that cannot lead to long term consistent profits.
How do we deal with this negative fear-based trading psychologye Well, that subject cannot be addressed in one article. I’m currently working on a complete home-study program on the mastery of trading psychology, which will provide you with the tools, strategies and techniques for overcoming these issues.
However in the meantime this statement from Ms Fine provides you with a really simple tool to add to your trading toolkit, to ensure you maintain focus during your analysis despite any internal or external distractions.
The process is similar for both long term traders and short term traders. But let’s talk short term first, because that’s primarily what I do.
As a day trader, your success comes from consistent application of your trading plan. Success comes from conducting analysis on a regular basis throughout the trading session, either on the close of each candle or on a price-alert as price reaches a certain preset level, and then acting appropriately to enter, manage or exit your trades.
What do you need to do to ensure that your focus remains on the process of tradinge
Here’s what I do:
1.
