As promised, here is the last portion of my take on the highly recommended Traders Pendulum book by Jody Samuels.
Habit 8 – Measuring Performance
This discusses trading journals, documentation and maintaining statistics. (Pretty much everyone in the trading community says that this is very important!)
Applying this to my situation – I am totally all over this with my trading r
ecords, trading blog, and documentation of completed trades.
Habit 9 – Emulating successful traders
Discusses the importance of learning from successful traders.
Again, a tricky part is finding successful traders.
Provides an overview of how the typical successful traders spends his day. Applying this to me, I actually spend my normal trading days in this manner – digesting market news and sentiment, identifying instruments to trade, setting up the charts, anticipating potential setups, and being aware of important price levels, and reviewing my trades at the end of the day.
Discusses the typical traits of successful traders. Two thirds of the traits relate to psychological aspects, rather than to technical aspects. There are several typical traits from the list that I am missing. These are to have a positive mental attitude, to be psychologically/mentally/physically strong, to be confident of being worthy of success and to be a master of time and self-management. However, there are quite a few traits on the list that I do have – ambitious, focused, strong-willed, passionate, persistent, not afraid of making mistakes, uncomfortable when staying in the comfort zone, learning from my mistakes and from my good points, keen on training/learning/coaching, observant learner.
Additionally, it is important to seek out those successful traders, learn from them, and copy what they do. Basically any trader that is already achieving what I am aiming for? Where do I find these traders? Think through the traders that i already know. Have they been making consistent profits for a prolonged period of time? Should I search for them on trading forums such as Trade2Win and Elite Trader? Try to learn as much as possible from them – have conversations and discussions with them. I am sometimes doing that, but I should it in a more structured manner and seek out specific action points.
Habit 10 Balance
Here the author warns about the danger of having an imbalance between work and play. Traders who have such an imbalance for a prolonged period of time are likely to eventually hit trader burnout.
Applying this to me, it reminds me of the need to plan my life away from trading. I need to make time for hobbies, friends, social life, sport, family, travel and relationships. All these things make me happy and make me a fuller person, and allow me to contribute to the life of others. There should also be time for starting and operating other business ventures (to allows one to also do some work on a “Plan B”, should trading simply not work out). This is true both on organizing one week to the next, as well as one month to the next, and planning for bigger travels in the future.
It’s also important to celebrate milestones and goals set in the business plans.
All in All…..
This book was a great read – it made me think about my trading activity from a few new angles and pointed out a few things that I failed to be aware of! I highly recommend it to anyone aspiring trader!