Many people look forward to a new year as a fresh start, a chance to draw a line under the past and move forward working towards a better future. New Year’s resolutions are a great example of how we can embrace this idea of a fresh start to work on achieving what we want whether that be a better body, better job, better relationship or any other number of goals.
For traders, the new year presents exactly this opportunity, which is one not to be wasted. However, to make the most of the new year, you need to do a little planning and so here are a few top tips on how to get yourself in the best shape for the new year, in terms of trading only; we’ll leave the six pack up to you.
1- Strategy Review
Hopefully, you have been keeping consistent performance notes in your journal over the year. When it comes to reviewing performance, percentages and pips are not the be all and end all. We need to also consider other elements such as drawdown, hit ratio, recovery rate, periods of inactivity, etc.
Each of these stats is crucial in determining how successful your strategy really is. However, alongside this quantitative data, your journal is also a great place for taking a more qualitative approach; how do you feel while you were taking your trades? What did you notice about the market while you were trading? Did you stick to your plan exactly? A well-kept trading journal will offer invaluable insight into your overall trading process and also flag up any areas for improvement.
Going into the new year, you want to be sure that the strategy you are running is the best version possible and taking time to review your notes and go over your performance is the easiest way to decide what works and what needs improving before a fresh trading year commences.
2- Making sure your tech and workspace is in good shape
I’ve known many traders over the years who have consistently complained about their laptop being slow or not having enough screen space or office space to trade efficiently. Many of these traders are the type of people who like to have something to moan about while some genuinely have intended to improve their equipment and conditions but just never seem to find the time.
A new year is the perfect chance to get your act together. You wouldn’t compete with the top athletes in the world with a pair of knackered old trainers, and you wouldn’t go up against the top F1 racers in a beat-up old Volvo.
While your strategy and performance are ultimately the deciding factors in your success, you wouldn’t believe how much having the right equipment and conditions can help. If your computer is slow you can end up getting bad fills on trades and/or missing trading opportunities.
Similarly, if you don’t have enough screen space to monitor your charts, you can end up missing out on trades. Expanding this, if your internet connection is bad, this can wreak havoc with your trade management and cause all sorts of problems especially if you are a shorter time frame trader.
It is absolutely vital that you go into the new trading year with the equipment and conditions which will best foster your success whether you are the type of trader who likes to have something to moan about or not!
3- Consult your influences
The soaring growth of trading communities on online platforms such as social media has been a blessing for retail traders allowing for enhanced learning experiences through greater sharing of information as well as the presence of a support community for what can at times be a tough and emotionally demanding pursuit. However, having access to so many traders and so much information can also be a downside.
Many of the traders I have worked with have talked about not taking trades in their plans because of what some traders on Twitter or Facebook thought about the setup or because they saw someone on Instagram post a chart with the opposing view.
Just because someone is sharing their view, doesn’t mean it is worth listening to and so going into the new year is the perfect time to really take a look at the traders you follow most and whether you should actually be listening to them.
At the end of the day, you should always be following your own plan and taking your own trades but of course, it is nice to have fellow traders to follow and bounce off – you just want to make sure that these traders are as successful as they say they are and most of all, develop the independence to back your own view and go against consensus calls. Two opposing views is what makes a market after all.
So, in short, as you gear up for 2019, make sure that you take the time to review your strategy and that you are running the best possible version of it, ensure that your equipment and trading conditions are conducive to success (ditch that old laptop and get some extra monitors) and take the time to cull your social media connections to make sure that the voices you are listening to are worth your attention. Oh, and good luck with your six-pack.