Every trader has their own way of doing thing when it comes to trading. Like most things, we develop habits and rituals that give us the sense of having an edge over all others; to channel our trading powers and will to make profit, and find affirmation in the winning trades. Sometimes this is to give us a boost of confidence because the challenge in finding your trading edge.
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Do you ever wonder how people walk across hot coals without burning themselves, or how they can walk across nail beds without literally putting holes in their feet? Trading should also have you considering how edgy it is.
Invest too much and it can affect your physical health (stress) and home (lost your rent money). So, how does one find their trading edge?
The answer lies mainly in examining your trading history.
Many traders have a pretty decent trading history, but most are not digging into that history to try to find out what we are good at and where they might have screwed up. I’d liken it to reading through an old diary, it can be painful to see where you’ve been. Sometimes the road we travel is not an easy one. So, looking at your trade history is important because there are gems of data that could help improve your trading, especially if you haven’t done an assessment in a while.
Here a few pointers to examine in your trading history to find a potential trading edge.
Time
The time of trading could be the first place to look at to find patterns to determine your trading edge.
If you are a day trader, for example, looking at the time of day when you perform better is an excellent place to start.
Is your performance better during the afternoon or at night during the closing hours?
Looking at your history, have you noticed that you trade better on Mondays or Fridays?
Inspecting your history can reveal patterns that will show you what time of the day or week or month that you perform better or worse. That will not be without reason, though. There will be a reason you perform better on those days, and a careful x-ray of your history will reveal it. You may perform better on Mondays because you are refreshed and alert. You may have never had a winning run on Fridays because of stress from work on Fridays. From this, you can know not to trade on Fridays or tweak your Fridays to perform better.
Examine your history to see patterns your time or days or trading could be revealing.
Markets
The market is another place to look in order to find patterns and determine your trading edge.
Look at what type of market you are trading in to determine your edge.
If you are someone who trades in many markets, look at your history to determine what market you made more impact.
Let’s say you are trading Bitcoin and some altcoins. Rank your profitability based on the market you are trading on. Studying your history will prove to you what market to focus on and a reason to focus on it. You could find that you are losing money on trading altcoins and making money on Bitcoins.
You also have to look at the market broader theme position.
My best performance is in this kind of market condition. You could find that you perform better when there is an uptrend or when there is a drop-down in prices. Are you better when there is an all-time low in the market, or when there is an all-time high? You could find that you are good at trading when the market just broke out on a long time range.
Finding this pattern will help you find out your edge.
Check Trade Size
You can also find out from such things as your stop size. In other words, you are asking questions like, “are you a better trader when you a give more room, or are you a better trader when you are keeping your stop tight?”
The idea is to find the theme behind your stops that affects your performance and earnings. Other trading technicalities like scaling strategy hold duration and limit can also show you what your edge is.
The point is in looking at these indices in your trading history to reveal patterns that can help you work out what your trading is like.
Emotion
If you’re having a bad day, it might be affecting your trading, or vice versa. Essentially, if you don’t have a hold over your emotions then you could be making bad trades and this definitely affects your trading edge.
Looking at your personal history can also reveal what contributions your feelings are making to your trading story, as long as you are including that in your trading journal – and we highly recommend that you do.
What is going on in your personal life? What emotions are running through you, and why is that? How about your health? How is your health affecting your feelings, and ultimately your trading?
Trying to scrutinize your emotions when you’re feeling emotional isn’t going to help, but jotting down how you’re feeling and then reviewing it later can give you some insight into what’s happening and how it affects your trading edge, whether it’s a family or health issue, or simply having a bad day.
The point of finding these things out from your history is to arm you with enough information to know how to manage your self going forward. You are a mighty fine blade, friend, and I won’t insult you by saying you’re dull, but sometimes you just need to sharpen that edge a little.
Disclaimer
Content provided by CryptoTraderNews is for informational purposes only, and should not be construed as legal, tax, investment, financial, or other advice. All information is of a general nature. As always, there is risk with any investment. In exchange for using our products and services, you agree not to hold CryptoTraderNews Pro, its affiliates, or any third party service provider liable for any possible claim for damages arising from decisions you make based on information made available to you through our services.
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