You would have most likely have been told plenty of times that if you want to be good at something, you will need to practice, practice and practice. The same goes for trading, you will only become truly good at it, or more efficient at it if you put in the work and practice. The practice needs to be focused though, you need to concentrate on a specific aspect of your trading, if you are struggling with your analysis speed, then there is no point in practicing other aspects of trading. Doing these things over and over is known as deliberate practice, the idea of doing the same thing over and over so that you improve on it.
Practicing is not all about the simple thing of doing something over and over though, in order for it to be effective you also need to have some additional aspects thrown in, if you are practicing something, how are you going to work out whether or not you are doing better now than you were before? You would of course have some form of measurement, a way of seeing your progress, and a way of ensuring that you are in fact getting better at what you are doing.
If you are going for your analysis time, simply start a stopwatch before you start and then end it when you finish, this was you can see the progress, of course, this is tricky in this regard as different analysis takes different time, especially if there is more happening in the markets, so ensure that whatever way you measure it, it is recordable and has as much information that is needed to make it relevant. So when we look at the art of deliberate practice, we can break it down into three different stages:
The Act
The act is simply doing what it is that you need to do, the result of what you do doesn’t matter, it can be either successful or not successful, this does not matter. The important thing is that you tried to do it and that you tried your best. When we think about this in a trading scenario, it is simply the act of putting on trades, either in demo or in live (although if you are just starting out then we would recommend demo trades).
Feedback
One of the things that many people find hard is to give themselves some honest feedback, people often either go too nicely or too harshly on themselves. So instead you need to be able to give yourself some third-party feedback. You can still do this by yourself, but it will require you to record everything that you have done and everything that there is to know about each action that you have taken. This will then allow you to look back at it from a new point of view to see what has gone wrong and what has gone well. Keeping a trading journal is perfect for this.
Incorporation
The third stage of trading is the incorporation of the information you have received. This is where you need to look at the feedback that you received and then put it into action. If there is something that is constantly going wrong, then stop doing it, look at what it is and adjust it to hopefully be more successful. If you do this with a new aspect every single day then you will be slowly changing your routines and your trading habits to be better suited and more successful. Constantly going through the three cycles will keep the improvements coming through this form of practice.
Those are the three stages of deliberate practice, but we need to remember that it doesn’t always start out easy, trading and this form of practice get easier and quicker the more you do it. When you first start out you will be pretty slow, working out what to write down and then working out what it actually means. The more that you do it though, the better you will be at it and the quicker the entire process becomes.
There are however things that people do, and do quite a lot which can hamper the progress of this form of deliberate trading, so let’s take a little look at what they are, remember, these are things that you need to try and avoid as much as you can, as they will only end up setting you back.
Mindlessness
The act of deliberate trading as we discussed above is all about repeating a certain action with the mind that you will be improving it. The problem comes from that old saying of doing something for 10,000 hours and you will be an expert. Unfortunately, this is not the case. If you are simply doing something over and over without understanding why you are doing it, or mindfully recording what you’re doing, then the work that you are putting in is pretty much useless. Simply repeating something does not mean progress, you need to have a focus on the errors and then rectify them, not simply doing it over and over again.
Inconsistency
Being consistent is important, at the start of the process you need to be consistent in order to properly work out where the weak spots are and what it is that you need to improve. Once you are past that initial stage then consistency is important in order to ensure that you are constantly doing the right thing and that you will not end up falling back into the bad habits which were causing the issues in the first place. Track errors, change them, and then keep them changed.
Not Tracking Progress
You need to be tracking your progress and what it is that you are doing. This cannot be said enough as even when not doing this form of practicing, you should be tracking what it is that you are doing. If you aren’t doing this, how are you going to know whether or not you have made any progress? The simple answer is that you won’t. We understand that it takes up time and that it can be boring, but it is so vital that you do it that if you manage to forget, it makes the entire process completely pointless and a waste of time. So set up a trading journal, you will thank yourself in the long run, as there are very very few successful traders without one.
Pride
Pride can be a good thing, being proud of the work that you do is always good, but you don’t want to let it take over. If you do, then it can cause you to simply stop improving If you are too proud of your work, why would you need to improve it? It’s already perfect. If you have this mentality then your progress will simply stop and you will just keep on doing exactly what it is that you are doing. So don’t hold onto things too much and remember that anything may need changing at some point, just be open and ready when it needs to be changed.
Have you been practicing or do you plan on doing it? Just remember to always be open to changes, record what it is that you are doing and you will be able to improve on your overall trading. Practice can be fantastic too, so as long as you understand why you are doing it and not simply aimlessly doing something over and over again.