Generating better ideas
Looking at 2014, most traders can find missed opportunities. The opportunities are missed because we were not focusing on the right markets or the right stocks in the right time frames. Improving our data at more things in different ways is an important step in feeding our pattern recognition.
Reading fresh perspectives from knowledgeable writers and speaking with insightful traders similarly can fuel our creative thinking.
Better risk management and opportunity management
It helps to look at the tails of your P/L distribution. That is a challenge for risk management: sizing positions appropriately, utilizing reasonable stops, ensuring that multiple positions are sufficiently uncorrelated, using options rather than cash where prudent, etc.
Better entry and exit execution
It doesn't show up in the P/L stats directly, but looking at how your trades performed after you entered and after you exited will give you some idea as to whether your execution is adding value.
Too often traders will chase market moves and enter at bad levels and/or puke out of trades on noise and exit prematurely. Your review of market paths following recent entries and exits can identify those problems.
No one should hold themselves to buying the low tick and selling the high one.
Everyone likes to identify the next big trade. It's like throwing the long pass for a touchdown. In reality the game is more often won by the unsexy blocking and tackling: gathering information to generate better ideas, managing positions better, and having clear and useful entry and exit criteria.
Looking at 2014, most traders can find missed opportunities. The opportunities are missed because we were not focusing on the right markets or the right stocks in the right time frames. Improving our data at more things in different ways is an important step in feeding our pattern recognition.
Reading fresh perspectives from knowledgeable writers and speaking with insightful traders similarly can fuel our creative thinking.
Better risk management and opportunity management
It helps to look at the tails of your P/L distribution. That is a challenge for risk management: sizing positions appropriately, utilizing reasonable stops, ensuring that multiple positions are sufficiently uncorrelated, using options rather than cash where prudent, etc.
Better entry and exit execution
It doesn't show up in the P/L stats directly, but looking at how your trades performed after you entered and after you exited will give you some idea as to whether your execution is adding value.
Too often traders will chase market moves and enter at bad levels and/or puke out of trades on noise and exit prematurely. Your review of market paths following recent entries and exits can identify those problems.
No one should hold themselves to buying the low tick and selling the high one.
Everyone likes to identify the next big trade. It's like throwing the long pass for a touchdown. In reality the game is more often won by the unsexy blocking and tackling: gathering information to generate better ideas, managing positions better, and having clear and useful entry and exit criteria.
