2022 New Year Trading Resolution
Several people would’ve retrogressed by the end of January regarding new year’s resolutions. Most memberships of fitness clubs will skyrocket around the first week of the year, yet several people would’ve stopped frequently attending within a month or two of the new year. Unfortunately it’s a sad but accurate fact of human nature that most people can’t simply make and stick to a plan.
This 2022, I want you to be a different version of yourself than you were in 2021. Forget about your failed achievements of 2021 because it’s now in the past. We should focus and look forward to the future and try to correct our behavior to stick to our plans and better ourselves in the new year.
As multi-asset traders trading forex, futures, and stocks we all have areas of weaknesses we want to strengthen. The new year provides everyone, including traders, an opportunity to start afresh and remedy any major issues we may have had in the previous year. This article contains exercises that I would like you to take very seriously because doing so or not may make or break your trading account for 2022.
Below is a list of major issues our online trading academy students face and how to resolve them, divided into small achievable goals you can work on daily, weekly, monthly.
Closing Trades Too Early
In 2021, how often did you close your trades too soon? Exiting trades before they escalate in your favor is a truly frustrating issue. You wouldn’t get ahead as a forex, futures, stock trader if you keep taking small profits because you need to be occasionally successful to cover your losses and keep you profitable. Find below some workable suggestions on how to stop closing trades too early and start concentrating on those big moves in the market:
- Remember, good trades take a longer time to play out. This means that frequently a strong move goes much further than you think it can. The only factor you’re unaware of is how long it takes to do so, which confuses most traders. Winning trades require PATIENCE, and you also need to STOP watching them too much. Believe me when I say that watching your trades all the time is like the “kiss of death” for a trader because I have experienced it most frequently.
- Your trades should have an exit strategy before you enter them. By doing so, you wouldn’t be leaving the exit to a last-minute emotional decision that always ends up the wrong one. Sure, there will be a time when the market conditions will change drastically, justifying your early exit. However, it’s something you shouldn’t do until you’ve proven to yourself that you can maintain a very rigid trade exit plan because it takes time and experience to know. Pre-classify your exit at a risk/reward of 1:2 or more on every trade and KEEP AT IT. If you do this for 2022, you will likely end up way ahead of where you did last year. It’s amazing how far a bit of self-discipline and constantly sticking to your pre-defined plan goes.
Being Afraid to Enter, Missing out on Good Trades
How often did you sit and stare at a pin bar signal with multiple points of confluence behind it, and instead of taking the trade, looked for several reasons the trade “might not work out?” Countless traders do this because they’re scared of losing money. Surely, you will lose money trading, but you must know that the only way to limit the emotional impacts is to reduce your risk per trade to a level you can emotionally handle. Here are some doable steps you can employ to minimize and hopefully remove fear from messing up your trading performance this year:
- Try not to overthink a trade. Launch a trade and walk away once you find an obvious, high-quality price action signal that suits your trading plan standards. Don’t bury yourself in research to prove why that trade might not work. Newsflash! ANY trade can end in a loss. We are TRADING OUR EDGE, which you must do to have a chance of making money in the long run. You won’t make money if you keep overthinking every trade and panicking.
Not risking more than you’re okay with losing per trade will greatly lessen the amount of fear you’d feel during the trading and trade analysis procedure. If your risk per trade is executed at a dollar amount you are comfortable with, then you’re covered.
Not Being Reasonable About the Nature of Trading
- Losing trades is expected. Deal with it. However, learning to lose properly is necessary for making money as a trader. If you’re unable to manage your risks and control your urges to over-trade, you will lose too much money and blow your account. Here are some feasible steps to take to get accustomed to the nature of the market and what is possible:
- Remember: ANY given trading edge has a random distribution of wins and losses. Your wins and losses will always be randomly distributed, even if you’re trading with my price action strategies or another method. Meaning that you may have a 60%-win rate over a year, but you don’t know WHICH trades will be successful and which will not. So, you could believably lose four trades in a row, out of 10 with a 60%-win rate, and within 100 trades, you could lose much more than 4 in a row and still be at a 60%-win rate. So, you must ask yourself if you are courageous enough to hold a losing streak. It comes down to properly controlling your bankroll and not over-trading!
- Get rid of the “get-rich-quick” mentality. To the average trader, “get-rich-quick” is when you add to your position because you’re in profits, and then the market reverses, and that second position suddenly becomes negative. That’s a classic example of a screwed-up trade because you were greedy and trying to make fast money. Be REALISTIC about what’s conceivable and try not to get dollar signs in your eyes. Remember, the market ebbs and flows, and when a position is profitable and constantly up, the market may switch soon. You can pyramid into a position after pullbacks within the trend in most cases, not when the market is in your favor and possibly over-stretched in that direction.
Being Greedy: Risking Too Much or Trading Too Much
A million times, it’s been stated that bulls make money, bears make money, but pigs get SLAUGHTERED, which is very accurate. Would you like to make money or be “slaughtered” by the market? The answer seems pretty obvious. However, most traders act like they want to be slaughtered by the market. Below are tips on how to avoid that in 2022:
- Control your risk per trade. Honestly, many traders don’t do this, and you’re probably not doing this too. Ask yourself how many dollars you risk per trade and if it’s an amount you are okay with, without having the compulsion to check your laptop in the middle of the night to see what the markets are doing. However, if you’re guilty of doing this, you will lose so much more than your sleep, and you will lose your trading money and possibly more if you cannot control yourself.
- Don’t be greedy. If you’re over-trading, you’re also being greedy. The only difference is, you’re going about it differently. Several traders believe that they are not being greedy if they’re not risking too much. However, it doesn’t matter if you’re controlling your risk well. If you’re over-trading, you’re still being greedy. Adopt a low-frequency trading approach in 2022. Combining this with managing your risk will get rid of the damaging effects of greed on your trading account.
Giving Back Profits
Does your trading account constantly fluctuate and then remain down where it started? I’m sure you would like your account to always move high and only slightly dip in between. To achieve this, you must stop returning all your profits. Traders return their profits for several reasons; however, here are some steps to help you conquer this problem in 2022:
- After winning a trade, detach yourself from your computer and the charts. Don’t go about looking for another trade to enter. Likely, there isn’t any, but if you keep looking, you will establish one. Traders tend to over-trade after securing a win in a trade. Because it makes them feel good, they look for another trade to enter. While it’s okay to feel great after a winning trade, you should channel that positive energy to something apart from trading. Otherwise, you’d end up returning those profits you suffered and waited patiently to win.
- If you realize you’re giving up profits because you aren’t getting them, you need to plan to secure them. Before now, I wrote an article about an easy trade exit strategy you can use to secure profits instead of letting them disappear.
Not Having the Right Strategy or Trading Method
Many traders don’t have the right or any trading strategy, and if you’re like them, you will go nowhere in a heartbeat. You’d be amazed by the number of traders that act recklessly in the market. What I mean is, they randomly enter the market with no real solid approach or trading method. To understand the market or to gain the research abilities, joining an Online trading academy will be the best decision.
I recommend that you learn how to read the supply and demand charts and use the supply and demand based strategy we teach at our online trading academy because it is the easiest and most precise way to trade the markets. Don’t cover your charts in messy indicators. It’s not necessary as it complicates the whole trading process.
If your 2021 trading performance did not pan out the way you hoped it would, the only thing you can do is to learn from it and move on. It is pointless getting upset over past mistakes and “what might have been” repeatedly. Be ready to learn from your mistakes and develop as a trader. Use your mistakes as a tool to improve yourself and not let them drag you down.
I hope that the ideas, tips, and knowledge shared in today’s lesson will stimulate you to tackle 2022 with a clear head and a proper trading attitude. Remember that big goals like “becoming a profitable or successful trader” are not achieved immediately. Instead, they result from several smaller goals you worked hard to complete. Grand goals must be divided into smaller “consumable” realistic and measurable pieces every day. I also hope that our lessons in the previous year and explained further in our online trading academy program will prepare you to master every aspect of trading you need to become a profitable trader.
I wish every one of you a Happy and prosperous New Year. Thank you for following us and taking our lessons. I hope they helped you, and I hope to assist you more in 2022.
Author Bio- Bernd Skorupinski teaches the undiluted truth about trading at the best online trading academy and takes you through what it takes to be a consistently successful forex trader. His favorite moment as an expert in the online trading campus who teaches trading is the way peoples’ eyes light up with excitement and confidence when they understand how Supply and Demand trading strategy works and how it can help win in the trading arena.