Now that we’re approaching the end of the first half of the year, I thought it would be a good time to start talking about habits.
Have you successfully formed the habits that you said you would at the start of the year?
If you haven’t, then here are a few tips that might help you get closer to your goals:
1. Be specific
Promising to “eat healthy” or “spend less on DoorDash” is not enough.How many calories will you cut from your current diet? How many times a week will you cook at home instead of ordering food online? How long will you implement these changes until you review your execution plans?
Traders also need clear rules to form new habits.
Instead of planning to “be more disciplined,” you can aim for specific goals like taking profits when your gains hit 30% or not checking your social media during your trading hours.
2. Make it easy for you
You’re more likely to stick to a habit if it’s “easy” for you to do it.
Planning on avoiding meme stocks? Remove them from your watchlists. Want to be more consistent with your trade journaling? Start with the basic stats and then add more info only when you’re more consistent with your entries.
When forming new habits, you’ll want to prioritize consistency before you work on improving your execution.
3. Set up reward systems
If you get rewards every time you follow your new rule, you’ll be more motivated to keep doing it, and eventually, you’ll get enough repetition to turn it into a habit.
You don’t have to be fancy about your rewards. It can be as simple as more funds for your “Diamond Hands” trades or maybe an extra half-hour allowance for gaming. Use whatever is effective for you!
4. Work on one habit at a time
Sure, it would be nice to form TEN new trading habits and become an uber disciplined and consistently profitable trader in two months.
But remember that, like our muscles, our discipline and willpower have limits. One trading rule done consistently is better than five new “habits” done whenever you feel like it.
Forming new habits is not an easy endeavor. But if you want to become a consistently profitable trader, you’ll need to form key habits that would help keep your edge and improve your trading processes.