Trading resolutions for 2016

It’s that time of the year when we mull over the mistakes of the past 12 months … and the successes.

For someone who’s been trading for as many years as I have, I’m always surprised at the mistakes I still make (again and again) … perhaps 2016 will be the year I learn …!

A good trick with New Year resolutions, I find, is to have a few of them – you don’t want to put all your NY good intentions into one basket. And keep them specific. Trading resolutions like “I’ll make more money from trading in 2016” is a great sentiment – but how will you actually do this?

1. I will trade less, but win more

The problem with labelling yourself as a ‘trader’ is that you feel an overwhelming urge to place a trade whenever you come to your screens and look at a chart.

I must tell myself 5 times a day that ‘sitting out’ is an active trading decision. Yet I still feel an itch to press that ‘buy’ button.

Trading less often can work like a filter on your trading – ensuring you only select the best set-ups. I hope that I can start to do this more naturally, rather than constantly catching myself in the markets, when I’d really be better off watching from the sidelines that day.

2. I will think more about time as a risk factor.

For every minute I’m in a trade, my money is at risk. It’s easy to view risk just in terms of stakes and distances to stop levels … but time is a crucial factor (it’s just tougher to calculate the risk it carries).

I’ll give myself a timeframe for my trades to pan out – if they don’t cut it, I should get out.

3. I will not get greedy

This is a good one, for this time of year, given the food I’ve consumed this week!

Greed is that devil on our shoulders that we must be at battle with constantly. And in 2015, greedy trading almost got me into a lot of trouble. I think of myself as someone who has a good grasp on the risks I’m taking, and how far I’m willing to push my limits, but this year I gave myself quite a scare by pushing my stakes, seeking a higher return.

Greed leads traders to take bigger risks than they should … to over-leverage … to trade with funds they can’t afford to lose … and to hold onto an open position for longer than they should …

Ultimately, greedy trading always lands us in hot water.

4. I will control my emotions

It’s considerably easier to control your trading emotions when you aren’t pushing your risk levels too hard!

But even when we’re trading sensibly, we get shaken by losses, and full of self-doubt … and we can also get carried away by winners, thinking we’re invincible.

Both are dangerous to your profitability.

5. I will not try to be clever

‘Brilliant trade ideas’ are the downfall of many smart traders. It’s all too easy to get swept up in the story of a great money-making plan. Choosing trades is not about picking something you find clever or interesting … it’s about making a profit from a methodical plan.

Boring, yes. But this is what actually works.

When I think I’m being smart, I’m usually trying to second-guess the markets – this is a fool’s errand, because no one can know what the markets will do.

6. I will learn from my mistakes

Earlier I touched on some mistakes I made in 2015. I’m currently writing up a report on my PIE trading for the last year – which gives a full warts-and-all report of how PIE handled the turbulent markets at the end of the summer/beginning of the autumn. And – more importantly – how I handled things. And how I SHOULD have handled things.

I’ll be publishing this report in the next few weeks, I and I hope you’ll take a look at it – whether you’re considering the PIE system or not. [UPDATE: PIE REPORT is now available HERE]

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