Boy, does time fly by when you’re having fun trading! Now that we’re entering the second half of the year, now’s as good a time as any to make a few tweaks and find ways to improve your trading.
By now you’ve probably read and made Q2 2012 trading reflections like the ones that Pipcrawler, Cyclopip, Happy Pip, and Huck have been sharing over the past couple of days. If you have, then you’re most likely thinking of making a couple of changes in your trading approach as well.
Now, change is almost always never easy, so here are three things that you have to remember in order to successfully implement those changes.
1. Make sure you’re ready for changes
The first step in successfully making changes is to make sure you’re ready for them. After all, how can you invest the necessary effort in implementing those changes if you don’t want them badly enough anyway?
List down the changes that you’re thinking of making and specify why you think you should make them. Let’s say you’re thinking of scaling down your positions.
Is it because you were risking too much per trade? Or maybe you’re thinking of placing tighter stop losses. Is it because you’re letting your losers run?
Justifying why you have to make the change reminds you of the need to make them. Once you see the need for it, it will be easier for you to want those changes and be ready for them.
2. Tackle one change at a time
One of the biggest enemies of change is attempting too many of them at the same time. Sure you have a lot to work on, but if you handle them all at the same time, you’ll most likely end up biting off more than you can chew.There is no sense in putting too much pressure on yourself that you won’t be able to sustain them.
Break up your goals into milestones (or mini-goals), prioritize which goal you would like to work on, and give it your full focus. Move on to the next goal only when you think you can sustain the one you’re working on.
3. Don’t Let Your Guard Down
Just because you’ve made progress towards reaching your goals doesn’t mean you can sit back, chill, and have a margarita. In fact, the time when you’re making progress is the BEST time to work even HARDER to attain your goals.
Take for example boxing great Manny Pacquiao. He could have stopped when he won his first World Championship belt. Pacquiao could have eased on his training, fought a couple more fights, and retire for the rest of his life.
But Pacquiao didn’t stop there. He kept on training and diversifying his game. He didn’t settle for merely being a one-time world champion.
Letting your guard down and taking too much comfort in small victories increases your chances of having relapses. Just because you followed your new trading plan for a week doesn’t necessarily mean that you won’t go back to your old trading habits in the following weeks.
Don’t let yourself fall into the trap of mediocrity. Make sure that whatever your goal is, it becomes second nature to you before you move on to your next goal.
As the old cliché goes, sustaining change is much easier said than done. It is easy to say, “Okay, I’m going to change this part of my trading,” than it is to actually begin, follow-through, and sustain the change. The key, as is in most things worth pursuing in life, is a focus, dedication, and constant effort.