How can we improve our trading skill ?

Quote from etfarb:

can you give an example of reading both PA and VA bar by bar?
More...

Catch a pin bar that is above the daily average in volume for your time frame.

Catch the breakout of an inside bar that is above the average in volume for your time frame.

Catch the breakout of support or resistance that is above the average in volume for your time frame.

Practice that, and you are on your way.
 
Create an excel file of your trades. Why you got into the trade, was it profitable. Did you make mistakes. Try not to revenge trade wait for your setups. Stuff like that. Don't trade when the market is not active. For example, today wide spread between bid and ask not really worth the risk.
 
Quote from RCG Trader:

Catch a pin bar that is above the daily average in volume for your time frame.

Catch the breakout of an inside bar that is above the average in volume for your time frame.

Catch the breakout of support or resistance that is above the average in volume for your time frame.

Practice that, and you are on your way.
More...

Thanks a lot for that! I've been meaning to do some micro structure studies for a while but i'm not a Price Action guy or a chartist so its hard. but that provides some framework fursure!
 
Quote from Wide Tailz:

I've been trying to do this but it's just too fun ringing the register early.....

:(
More...


What do you like better? Fun or money?
 
I think there have been some good pointers here worth studying. My viewpoint is that the best way to develop trading skill is to:

-Develop a framework for discovering and refining trading ideas, which has both conceptual and technical elements
-Execute on your trading ideas diligently
-keep trading results from different ideas/systems separate and track results.
-expose yourself to new ideas from many sources and see if bringing them in to your process adds value

I do allot of discretionary trading, however my process is based on the concepts I have spend allot of time refining via research and development. I would say it is allot more like hunting (searching for ideas, edges, applications in a changing environment) and less like learning a static skill that once learned "you have it".
 
Agreed. Learning from mistakes is key as well. If you keep making the same mistakes over and over, you’re going to lose eventually.
 
Agreed too. TO improve your skill you should practice more and more.there are a lot of pairs .choose one of them,cause trying to trade with several pair is not a good idea at all.you might end up being a failure.learn more about Forex and practice in Demo. every time you face a volatile market you will get a new experience
 
Quote from etfarb:

Heres my take on improving our trading skills...

If your a successful discretionary trader please chim in; however, I'd like to argue that theres a reason why 95% of traders fail.

There's 3 areas to trading - Your psychology, your trade management, and your ability to correctly predict market direction (the hardest but most profitable area of all three)

One poster on this thread already mentioned that "it is a reason why he automates things" - Takes out emotion and if that works than great for you!

I don't think there's a holy grail in regards to DOM analysis or Tape reading - HFT destroys that edge

I personally don't think pyschology and money management matter. They do in regards to protecting your capital but is your trading due to an actual edge or is it complete chance?
More...

Psychology is critical. If your motivation sinks and you work 2 hours a week, your results are worse than if you are passionate about what you are doing and work a focused 40-50 hours per week. If you freak out when a trade goes against you, or get gung ho when you have big open profits, then you make inferior decisions compared to someone who is emotionally unperturbed by profit or loss.

Money management is also critical. If a super-favourable trade of the year candidate comes along and you only bet 0.5% of capital, you will do a lot worse than someone who goes in for the kill with a 5% wager. One 10:1 winner on a 5% bet is a 50% year just off one trade, versus 5% for the cautious trader who plays everything on the same small size. Someone who bets 5% on *all* trades will regularly have 30-40% drawdowns which will make it hard to be consistent, to press on the rare great setups, and to attract investor capital or (for sole traders) plan a consistent personal budget.

Correctly predicting market direction is not enough. It is quite possible to make a correct prediction but not take the trade, or to play it with too much size or too close a stop, and get squeezed out the first time the market tests your conviction with a pullback. You can be correct on direction but too early, and run out of patience, or suffer losses for months, then run out of conviction and exit. To profit from a correct prediction, you must i) place the trade before the move takes place ii) hold the trade until most or all of the profit is realised, without getting squeezed or bored out at any place from start to finish iii) exit before giving back most of your profits once the move ends iv) bet enough to matter, but not so much you become a weak hand v) not lose big on other trades (or lose small on lots of other trades).

So, correct prediction is only part of it. I think most traders have experienced being right but not making money (or even losing money).
 
Two other ways to improve skill.

First, imagine what a bad trader would do:

1. Enter trades impulsively without a proven strategy.
2. Size according to Martingale strategy rather than trade odds
3. Take too much risk on each trade.
4. Have no position management strategy to handle tests, pullbacks, or false signals, thus getting faked out often.
5. Have no exit strategy - either exit prematurely to grab a profit, or hang on too long as a 'true believer', because he has no method for detecting exit signals
6. Never plan how to react if the trade is wrong. Instead, assuming each trade will work out well, focusing only on the best outcome.
7. Have no method for systematically scanning for opportunities. Miss lots of potential setups as a result.
8. Put in low hours, work in an unprofessional environment, not communicate or work with good professional traders,
9. Fail to keep a trading diary or learn from mistakes, losses, and missed opportunities
10. Be lazy and not go the extra mile to improve each week/month/year.
11. Take lots of marginal trades without conviction
12. Not pay any attention to breaking news, forthcoming events, moves in related markets, sentiment, fundamentals, technicals etc.

So, a first step would be to iron out all those mistakes from one's own trading. Eliminating mistakes is much easier than consistently achieving superb performance, but is just as profitable and also reduces risk/drawdown. I have learned from painful experience that if you are making *any* mistakes, you have considerable scope for improvement. If you make no mistakes all year, THEN your only avenue for improvement is the more difficult path of improving your overall skill/experience/implementation ability. But how many traders can say they make no mistakes?
 
You must log in or register to reply here.
Back
Top