Day Trading Tweaks – How To Improve Yourself
Trading should be fun. Just as a farmer has fun ploughing his land, so should a trader. However, trading is not all that easy. Many people have suffered from depression or burnout for doing the wrong things when trading. For instance, some traders spend tens of hours every day finding opportunities from the market. The fact is that all this is not necessary. There are a few things that one can do that can help him become a better trader. This article highlights some of these day trading tweaks.
#1 – Having a Watchlist
A watchlist is a simple list of companies, bonds, ETFs, currencies, and commodities that you will be looking at. This is one of the most common day trading tweaks. As you already know, there are thousands of items you can trade on in the market. You can buy and sell thousands of shares or trade in the hundreds of ETFs. You can also trade the tens of commodities. However, unless you are a genius, it is not possible for you to trade or follow all these items. Even the best traders do not always follow what different companies are doing. In their place, they use a watchlist. A watchlist tracks only the items that a trader wants to follow. There are many ways of creating a watchlist. For instance, you can create one using the free Bloomberg or Reuters apps. You can also create a watchlist using Yahoo Finance or the hundreds of finance websites that allow this. The benefit of having a good watchlist is that it enables you to keep track of the movements of the assets. Also, it enables you receive breaking news about the companies that you track.
#2 – Keeping a Trading Journal
To many people, having a trading journal is an unnecessary day trading tweak. This is because the journal is a simple document that highlights the trades one enters. Quite often, they wonder on who needs a journal when this information can be automated. The fact is that even the best traders and investors around the world keep a journal. Warren Buffet and Charlie Munger who have invested for more than 50 years together have always advocated for having a journal. A journal should have the price and the reason why you long or short a stock or a currency. It helps you to come up with a good plan to trade.
#3 – Reflecting
This is another commonly overlooked thing many traders ignore. They don’t realize the value that it brings to them in the short term. In this, a trader needs to take time and reflect about his trades, whether positive or negative. A trader who does this helps himself identify his mistakes and then take measures to avoid the mistakes. I am a strong advocate in doing reflections or meditations two times per day; before you start trading and after trading. Doing this will help you avoid making the same mistakes again. It also helps you become a better trader by taking corrective measures when you err. This is probably one of the most important day trading tweaks.
#4 – Reading
Many people hate reading. I used to hate it too as well. However, the fact is that successful investors and traders spend some of their times reading. They read books, newspapers, and magazines. The benefit of reading is that it tells you what is happening and what you anticipate to happen in future. We are living in an age of disruption where new things are coming up every day. New innovations are being released on a daily basis. Opinion makers also release their findings on a daily basis. Therefore, as a trader, it is very important to be steps ahead of the other traders. Reading can help you achieve this goal. One of my most favorite books is Money Mavericks which explains the story of a disgraced hedge fund manager. If you have ambitions of starting your own hedge fund, you should read this book.