Deliberate Practice: Part 1

Whether it’s the result of unexpected market events or just a poor trade idea, losing money really sucks. What’s worse is that when it happens over and over again, it eventually affects your confidence and trading approach. Just to make up for your losses, some of you probably resort to revenge trading by throwing your trading plan out the window and jumping in at every possible trade opportunity. Or maybe you become so scared of incurring more losses that you even begin to avoid trading some of your best trading setups.

Instead of reacting negatively to losses, a better mindset would probably be one that involves actively learning and improving from those losses. Successful traders study the mistakes they make and the market conditions/behavior in which the losses occur. They try to dissect the factors behind those price movements and adapt their trade strategy accordingly. By getting accustomed to this process of reviewing both winning and losing trades–and actively adjusting to improve one’s system–losses can be soon minimized and market patterns can be learned.

This process is called deliberate practice and it’s what the pros do in any performance field to get better! Professionals of every kind (including athletes, doctors, musicians, etc.) participate in this process to get where they are today.

Deliberate practice can be broken up into three primary stages: the act itself, feedback, and incorporation. Let me discuss each one.

1. The Act

As the name suggest, the act is your attempted performance. It doesn’t matter whether it was successful or not; what is important is that you tried to the best of your abilities. In forex, the act pertains to actually taking demo or live trades.

2. Feedback

You must always remember that you cannot actively watch yourself when you trade. Instead of mindlessly going through the motions, you need to make a conscious effort to take a third-person point of view, record everything you can of your performance, and analyze what you did right and what you did wrong.

3. Incorporation

After you have properly recorded what you have done, you now need to take the steps needed to change the things that need changing. Ask questions like, “which pairs do I trade well?”, “which pairs do I do poorly?”, “what market times are more suitable for my systems?”, etc. By actively doing this everyday, you are able to jumpstart competence and develop your skills much, much faster.

By engaging in deliberate practice every day, not only does it become easier but the effect of the recording, reviewing and making adjustments turns one trading experience into many–thus speeding up the learning process. Getting a jump start on this process is not hard at all. In fact you’ve got all the tools you need right at your fingertips!

For now, we’ll let that sink in for all you new, and experienced, traders out there, and be sure to check out part two next week. Until then, you can begin your own “deliberate practice” process by creating your own online trading journal at MeetPips.com. See ya soon!

  • Shindhu Manob

    I use three different methods of keeping record of my trading journal.

    1. Meetpips/Myfxbook/ForexFactory Trade Explorer
    2. Taking screenshot of my trade and write comments on the image. I also pointed out some important things that i have noticed in the chart.
    3. I use Camtasia for recording a video of my trading journal. I describe what happened with the trade. If it is wining trade, Why I have won the trade? Did I follow my trading plan? How to maximize profits? etc…

    For losing trade>>> Why I have lost the trade?
                          >>>> Did i follow my trading plan?
                          >>>> How to minimize losses? Is it necessary to make some corrections of my trading plan?

  • Forex-forum Dhaka

    the euro were dead yesterday night.

  • harachel

    As always your writing is great for my trading development Doc!,,
    Yes, now I am on my “deliberate practice” as you said above.
    I realized that I must follow my trading rules whatever the market does. My turning point was last month ago when I broke my account just in one day when the candlestick had very long body and very tempted for me for getting some pips and I traded very emotionally.

  • harachel

    As always your writing is great for my trading development Doc!,,
    Yes, now I am on my “deliberate practice” as you said above.
    I realized that I must follow my trading rules whatever the market does. My turning point was last month ago when I broke my account just in one day when the candlestick had very long body and very tempted for me for getting some pips and I traded very emotionally.

  • Jerome

    Great Advice, I have slowly begun to see my mistakes which has help me to gain a better insight on the movement of the market what mazes me after a year in half of trading you can actually gain experience like in anything else, that had never occured to me until I started recogonizing movements & patterns that was once not so obvious to me.

    What I going to do now after reading this articule is use a tape recorder and talk out loud to myself as why I made the trade and base on what ,as well as what currency pair I’m trading, and then record out loud the results of the trade for examination.

    Thank again Doc, I quietly have been reading your post for as long as been trading.

  • Jerome

    Great Advice, I have slowly begun to see my mistakes which has help me to gain a better insight on the movement of the market what mazes me after a year in half of trading you can actually gain experience like in anything else, that had never occured to me until I started recogonizing movements & patterns that was once not so obvious to me.

    What I going to do now after reading this articule is use a tape recorder and talk out loud to myself as why I made the trade and base on what ,as well as what currency pair I’m trading, and then record out loud the results of the trade for examination.

    Thank again Doc, I quietly have been reading your post for as long as been trading.

  • http://www.facebook.com/people/Forex-forum-Dhaka/100002820830512 Forex-forum Dhaka

    the euro were dead yesterday night.

  • http://www.facebook.com/cadet.joynal Shindhu Manob

    I use three different methods of keeping record of my trading journal.

    1. Meetpips/Myfxbook/ForexFactory Trade Explorer
    2. Taking screenshot of my trade and write comments on the image. I also pointed out some important things that i have noticed in the chart.
    3. I use Camtasia for recording a video of my trading journal. I describe what happened with the trade. If it is wining trade, Why I have won the trade? Did I follow my trading plan? How to maximize profits? etc…

    For losing trade>>> Why I have lost the trade?
                          >>>> Did i follow my trading plan?
                          >>>> How to minimize losses? Is it necessary to make some corrections of my trading plan?

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