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Focus on Learning

One of the biggest mistakes that I see in many new traders make is focussing too much on trying to make money, and be successful and profitable right from the very start. Of course in trading the goal is to make money, but for a new trader focussing on making money, on earning, is detrimental to what is critical at this stage which is learning.  With too much focus on P&L and trying to make money you may get some short term success, but the reduced focus on learning at this time has a detrimental effect on your performance in the longer term.

Explore, Experiment and Play

At the beginning of the learning phase it is important for you to experiment and to explore different markets and trading styles and strategies without a strong expectation of results. This process is a key part of the learning phase for any new activity and is critical for traders in helping them to find their own unique style and approach.

Embrace Mistakes

I cannot stress strongly enough how important it is to allow yourself to make mistakes. Mistakes are a natural part of the learning process, and provide opportunities to learn and develop your trading. If you are exploring, experimenting, trying ideas out and getting involved with the markets then you can expect to make mistakes to happen. Embrace them, see them as key to your learning and development. If you are not making many mistakes as a beginner then it may be that you are not fully committed to learning. Often traders worry about making mistakes, and make fewest mistakes when they are too focused on making money.

Immerse Yourself In Your Trading

One of the factors that enables people to become experts is an immersion into their field. That is they get really involved with the activity, they read about it, watch videos, spend time practising, in short they spend a large amount of time taking action that improves their abilities - ‘the rage to master’. Immersion accelerates learning by creating lots of hours of practise which as we will see shortly is key to skill and expertise development. But what leads to immersion, well that usually stems from a strong interest or enjoyment in an activity, or from having early success, or sensing potential success. It is hard to commit to long hours of practise and study without either enjoyment or success in an activity.  If you have a strong interest in trading, or you really enjoy trading or you have had some success or feel you could be successful then immersion is likely to follow quite naturally.

Practise

Practise is the bedrock of building expertise and developing any skill. To become skilled at trading, to become an expert, you are going to need to do a lot of practise, and in trading that means time at the screen and away from it. We have talked about the importance of immersion in the markets in developing trading expertise, but it we must make a slight distinction here, in that it is not just about time, it is also a factor of what you did in that time, the quality of the experience, what you practised and how you practised.  One of the key principles that has come out of performance and learning psychology has been that of deliberate practise – practising with a purpose, and with a feedback, or learning loop. To move from just practising to deliberate practise you will need to make sure that you have a clear focus for what you are going to practise, then spend time practising it, and then after the practise period you will need to review how your practise went.

Learning  from Others

If you wanted to learn to play golf, fly a plane, learn the piano, drive a car or how to cook what would you do? The majority of people would perhaps consider getting some lessons or attending a course. If you wanted to become highly successful in those areas then training, coaching and mentoring would be probably foremost in your mind. Training, coaching and mentoring all play a significant part in a traders development, and where they are good, they can be a significant performance accelerator.

Best wishes for your trading journey!

Steve Ward
Traders Coach
If you would like a trading performance or psychology question answered by Steve please send it to askthecoach@fxtradermagazine.com

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