• 6 Keys to Stock Trading Excellence

  • 6 keys copyHow can you become excellent at stock trading? This is a question that was inspired by an article entitled Six Keys to Being Excellent at Anything by Tony Swartz. How do these six keys apply to stock trading?

    1. Pursue Your Passion.

    According to Swartz, passion “fuels focus, resilience, and perseverance. These are important attributes of the successful stock trader and they find their foundation in passion.

    2. Do the hardest work first.

    The greatest performers in any field delay instant gratification in pursuit of their ultimate goal, which is to be the best they can be while pushing through less than comfortable situations. The hardest work is determining a loss target. The very best traders determine where a loss is to be taken before determining where money can be made. It is difficult to consider how much you are willing to lose before you consider the instant gratification of adding to your bank account. Accept a loss and delay the gratification of instant money for the reward of a lifetime of income.

    3. Practice intensely.

    “Ninety minutes appears to be the maximum amount of time that we can bring the highest level of focus to any given activity.” It is very important that athletes and musicians in particular practice and practice intently every day but there are limits and the need for adequate rest. How does this relate to traders? Trade off bigger charts, such as the daily and weekly, along with one intra-day chart and by so doing allow yourself plenty of time to do other things, In fact, most of you would agree that when we walk away from the charts for a while we tend to see them with better clarity when we return. Trade intently but take a rest. The market will be here when you get back.

    4. Seek expert feedback.

    “The simpler and more precise the feedback, the more equipped you are to make adjustments.” This is where focus comes in. The best traders have found what works for them by paying attention to feedback. And where does a trader find feedback? The very best traders focus on a particular pattern or a particular market and know it so well that they know how to manage the winners and losers. This is much like a golfer who knows his swing so well that when he hooks a ball into the trees he knows exactly why. He knows what went wrong in his swing because he swings the same way every single time. The trader who trades the same pattern every single time knows what to watch when managing the trade. The trader who changes trading strategies will never be able to gauge what is working and what is not working. Proper feedback is based on doing the same thing over and over again.

    5. Take regular renewal breaks.

    “Relaxing after intense effort not only provides an opportunity to rejuvenate, but also to metabolize and embed learning. It’s also during rest that the right hemisphere becomes more dominant, which can lead to creative breakthroughs.” At the end of the trading day what do you do? Study charts for another three hours? Write in your journal? Walk away?

    6. Ritualize practice.

    “The best way to insure you’ll take on difficult tasks is to ritualize them — build specific, inviolable times at which you do them, so that over time you do them without having to squander energy thinking about them.” The best time to prepare for trading is before the market opens or late in the evening after you have had a break from the close. Execution is based on proper preparation. If you are properly prepared for the battle then the execution will be a synch.

    If you wish to excel at trading it is going to take a lot of hard work but anything really worth having comes with a sacrifice of one thing for another. As Mr Swartz sums it up: “If you want to be really good at something, it’s going to involve relentlessly pushing past your comfort zone, along with frustration, struggle, setbacks and failures. That’s true as long as you want to continue to improve, or even maintain a high level of excellence. The reward is that being really good at something you’ve earned through your own hard work can be immensely satisfying.”