The Best Way To Improve Your Trading(Key Points/ Cheat Sheet)

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Here are the key points from our video ‘The Best Way To Improve Your Trading (Progressing with Deliberate Practice)’ that you can use as a reference guide or ‘cheat sheet’. The video is available on our YouTube channel and at the bottom of this article.

  • During extensive studies Anders Ericsson identified three different types of practice: naive practice, purposeful practice and deliberate practice.
  • Naive practice is what most people will typically do and involves many repetitions of the same thing, often mindless and not challenging. This can happen with people learning anything, including trading. For example, once you’ve learned how to do certain things with your trading to a certain extent, you’ll probably be doing these things under naive practice conditions from then on. Like being in auto-pilot mode without really progressing.
  • The next phase of practice is purposeful practice. There are some basic factors that make up purposeful practice, they are: having a clear and specific goal, being completely focused during practice without distractions and without entering a mindless auto-pilot state, being able to maintain motivation, constantly pushing outside of your comfort zone to achieve new things, and being able to monitor progress and instantly receive feedback after each attempt of the task.
  • To fit this into our trading model we would need to break down our trading into the specific thing we’re learning about, we need to have a specific and clear goal. So an important first step is to create some sort of practice plan, where you’re able to cover everything you need, rather than going through everything altogether all at once.
  • Next, you will need to make sure you’re focused and without distraction, this means locking yourself away somewhere away from other people and potential distractions. You might want to use music or some sort of white noise to help you block out any external stimuli.
  • Maintaining motivation during this process will have to come from yourself. In most other activities, you can have a coach who helps you maintain motivation, but in the case of trading, it’s likely to be that you’re on your own, so the motivation will need to come from within.
  • Next, you will want to be following a plan for your learning but to be constantly pushing yourself out of your comfort zone. For example, you might start by just drawing all the trend lines you can find on one particular area of the chart. Then you might work in other exercises, such as finding a reversal on the chart and aiming to find any possible trend lines that could have been involved in that.
  • Next you will want to push yourself out of your comfort zone, where you might time yourself to draw a certain amount of trend lines e.g. to draw 20 in one minute. You can then alter this to make it faster or slower depending on how you get on. Then move to going ultra slow, spending a lot more time on one trend line, looking at it for five minutes to check every single touching point and every possible variation, taking notes of all the different aspects that led you to that decision.
  • You may then start to incorporate some trading based on the levels, so you push yourself out of your comfort zone again with the pressure of some competition, using a demo account. Or spend time observing a particular trend line in the live market and tallying how many times the market interacts with it during each candle that comes close. This will mean you are entirely focused on the action that is taking place.
  • Next, you need to be able to track your results and get feedback. For example, keep track of how many times your levels were correct in a week.
  • If you’re dedicated to progressing to a world class level, you need to spend some time actually creating some sort of training plan for each element or at least have a plan before you sit down for a practice session. Even if you are a consistent trader, this is an important thing to do to make sure you are continuing to improve and not just stagnating.
  • One of the key factors Ericsson identified for deliberate practice was that it had to be a well developed field and the best performers needed to be far superior to the rest of the people just entering the field. Deliberate practice should be based on using maximal effort all the time and is not necessarily designed to be fun or enjoyable. It’s pure work.
  • A critical point of deliberate practice is to have a coach to provide you with the feedback. Having results from the market is one thing, but having someone to tell you what you did right or wrong and correcting you or suggesting an alternative approach is another thing altogether.

To learn more about our method of trading, sign up for our FREE Inner Circle, so you can get access to our exclusive 4-part video mini-series and learn the foundations of our approach. Click here to register.

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