Unless you’re among the few who have worked their way into a hedge fund, proprietary trading firm, or institutional trading team, your access to an experienced and willing coach is probably slim to none.
While there are knowledgeable and talented individuals all across the internet (including the folks our super cool forex forum) who enjoy sharing what they do and willing to give out general advice, most of these fellas don’t have the time or ability to do the things that a coach does:
- Record and analyze your effort and results
- Observe and identify any psychological roadblocks
- Prescribe ways to improve trading processes or techniques specific to you
- Motivate you when you need it
Fortunately, there is an alternative that can be effective and it won’t cost you a dime: self-coaching!
Self-coaching involves doing all of the above-mentioned tasks on yourself, but it isn’t as easy as it sounds.
How can you coach yourself to perform better?
Well, here’s the first thing to know:
A coach is not necessarily a teacher.While the two roles can be blended and a coach can teach, a coach’s main job is to lead, observe, redirect, and motivate that individual or team to do the right things to achieve the goal.
Before one can be coachable, they must have the fundamental skills of their chosen profession internalized.
In the world of forex trading, you should have all of the fundamental knowledge and trading skills (e.g., understanding market behavior, entry/exit frameworks, trade/risk management, position sizing, etc.) locked down before taking trades and being coached.
Remember that no coach wants to waste their time on someone who isn’t serious.
The great thing is that forex trading concepts and techniques are mostly simple to understand, and can be found for free in our School of Pipsology.
Once you’re past the initial learning stage and have chosen a basic trading framework that you feel fits you, then the self-coaching (i.e., the real work of a trader) really begins.
The self-coaching process is very simple and at a bare minimum, only requires three things:
- A forex trading journal,
- Lots of self reflection and being honest about yourself, and
- Writing it all down.
Being able to screenshot charts and markin’ them up would make the process more efficient.
And if you have great attention to detail and you’re good with words, then it’s possible to work your way to the competency stage of development by diligently keeping a simple written journal.
The basic self-coaching process is the same as what a coach does:
1. Observe and record everything.
Write down your efforts, plans, and any mistakes and observations about yourself and market behavior that need to be addressed.
Remember, what isn’t measured can’t be managed or improved.
2. Review your observations.
With the solid fundamental forex trading knowledge and skillset already acquired, review your observations and determine how you can make better decisions or improve the trading process.
Trading concepts are pretty simple and only requires common sense to improve and avoid mistakes. But you have to ask A LOT of questions. Don’t just look at a winning trade and think, “I should have had a bigger gain.”
Ask questions so you can improve. Was my target appropriate? Should I have added to my position in this environment? Was my entry the best in this particular situation?
If you really need help, show your journal to others for feedback.
3. Create guidelines.
With time and practice, this can be internalized, but you should make it a habit to review it regularly.
Write down why you got into trading and/or your life goals. Review every day to motivate you.
You will need to do this because there will be days (very many in the beginning) where trading will not fun (read: profitable).
4. Rinse, repeat and stay focused.
That’s it, forex folks! Simple, but not easy as this will obviously be a lot of work.A lot of the questions you ask yourself to improve will take time, and maybe some experimentation before you find the right answer that fits you.
And don’t think this process only applies to discretionary traders, chartists, or mechanical traders. Robots need to be watched and improved upon as well, as with any other tool.
Keep in mind that there is no guarantee of success in anything we do, even when years of hard work is applied. This is especially true in the world of trading and investing as it will always be a game of probabilities.
But the one thing that I can say is that without a process of deliberate practice and reflection like self-coaching, your probability of success in this business is significantly reduced; maybe even zero.
So, don’t just look at charts, aimlessly buy or sell, call it day, and then grab a drink with friends to celebrate (or sulk) over your trading session… grab your journal and get to work!