According to Dr. Brett Steenbarger, one of the most well-known trading psychologists, traders are too negative when it comes to journaling. Only focusing on the negative aspects of trading and using a journal to talk mainly about losing trades can create a negative environment for your trading. In a different article, he highlighted that traders […]
All traders know that emotions and discipline are very important influencing factors in trading. Just think about your own trading for a moment and ask yourself how your equity graph would look like if you were able to control your emotions and your discipline better!? But as you probably know, it’s not as easy as […]
We frequently receive emails from Edgewonk users who seek advice about their journaling routine after they have been inconsistent with entering trades or have even missed days and sometimes weeks.
Now the question is: do you have to go back and re-enter all the trades since you left off, do you pick up now and do you have to start a new journal completely?
There are a few points I’d like to discuss in this context which will also make the purpose of a journal and a journaling routine clearer.
The most dangerous trading mistake any trader can make is “system hopping” and we believe that it is the single biggest cause for failure in trading.
System hopping means that a trader keeps changing his trading method, his indicators, entry signals and strategy all the time. While looking around for new strategies is normal in the beginning, when a trader still hops around systems after months, his chances to reach profitability in trading are slim to none.
Why do traders change systems?
Traders are always hoping to find the Holy Grail that will make them a lot of money without putting in a lot of work. But when does it ever work that way in life?
Do you like challenges and enjoy working hard for your success or are you one of those people who try to look for shortcuts and avoid solving hard problems? There are mainly two types of people when it comes to the attitude towards progress, improvement and success: growth and fixed mindset people.
Most people are not aware which group they belong to, but being self-aware of your personal mindset and attributes is essential for success – not only in trading but in life as well.
In this article, we will help you identify which group you belong to and how you can move forward and start improving.
Yes, I know you are scared. Surprised? You know it, too. You know exactly why you are not using a journal. “Later, later”, you tell yourself. “When I have a proper strategy” or “when I am profitable.” Funny! In Germany, we say that’s like shooting yourself from behind through the kneecap into your eyes. You […]
We have followed thousands of traders over the years and noticed that they almost all go through the exact same 5 stages. In psychology, it’s often referred to as the “conscious competence ladder” and it applies to trading as well.
Understanding at which stage you are right now can help you make the next step more easily and help you avoid the most common mistakes
Stage 1: Unconscious incompetence
This is the initial phase of a novice trader when he is just getting his feet wet in the markets. At that stage, a trader doesn’t know how much he doesn’t know, which can often be a liberating, but dangerous place to be in because the dangers are not obvious to him.
As we all know, emotions and psychology play an important role in trading and are often the maim cause for trading failure. In our Edgewonk trading journal we included a set of unique features and metrics that not only analyze the impacts of psychological biases, but also shows you exactly how to overcome these problems. In the following article we introduce the 4 most commonly observed psychological biases among traders and how Edgewonk helps you with overcoming these obstacles.
You probably know that you can’t win all your trades. But understanding that a winrate of 100% isn’t achievable and knowing how to effectively deal with losses when they occur are two very different things.
A baseball player who strikes 30% is considered world class, a basketball player who scores 45% is one of the greatest of all time and the best soccer player in the world has a shot accuracy of less than 40%.
In trading, traders go broke with winrates as high as 50% or above. Theoretically, a winrate of 50% should be more than enough for any trader to achieve all the success he is after. However, not knowing how to deal with losses is what breaks traders and it’s one of the main reason why traders struggle so much.
Learning by doing doesn’t really exist in trading and executing trades alone or randomly flipping through timeframes and staring at charts all day long will not make a difference either.
Luckily, there are a few very specific things that can help traders improve their skills rapidly and very targeted.