How to improve your trading confidence

You prepare for the trading day and honestly you are not confident that you will make money.

With each trade you are not sure you will make money. With your longs you are not sure you will make money. With your shorts you are not sure you will make money. You are not sure if you should be holding your winners longer. You are not sure if you should allow your losing trades more room.  You are not sure if you should not be making some trades that you are. You are not sure if you should be cutting your losing trades quicker.

You get the point. You are not sure.  You are not confident as a trader. You feel that if you were just confident, then you would break out as a trader.  You would then be able to experience what being one of the Consistently Profitable Traders is like.  How great would that be!

Let me tell you a story of a very confident, or so he said, trader and how he became truly confident.  And how you can become truly confident as a trader.

Trader was floundering with our firm.  Overall he was consistently losing money. But he had some really big wins, some really big trades in his work, as well.

Trader was a confident person overall.  He kept saying he was confident his results would improve if he just took his trades with his niche. 

But should he have been confident?  And remember I am talking about a very talented person.  Someone who has real ability to become an elite trader.  Honestly, someone who I expect to be a seven-figure trader at the firm next year.  

No!  No he should not have been confident.  Not at that point. He was consistently losing money overall. Thinking confidently was not going to help him win.  Trader needed to find a solution and change to start winning.

So I suggested he start keeping really good trading stats.  We import all of our trades into Tradervue.  We tag our trades and then are provided stats on the efficacy of each trade and much more.  

I suggested Trader meet with Dr. Steenbarger to go over his stats.  Hey it helps to have the best trading coach in the country working with your traders.  

Dr. Steenbarger found the solution to his trading from his trading stats. And then Trader stopped doing that which was causing overall negative PnL.

I spoke with Trader today after he met and worked with Dr. Steenbarger. He was *very* confident. Specifically, his win rate in his trades was 89 percent, up from 70 percent. Specifically, his losing trades were held for shorter duration. Specifically, Trader saw that his best trades were not scalps, but Trades2Hold.  Trader has made over 100k in PnL in less than a month. 

Trader will continue to keep detailed trading stats and meet with Dr. Steenbarger to ensure his edge is still present and improve from here.  But what an amazing place from which to improve as a trader! 

From here, we discussed 3 options.

1) Do not change anything.   Keep doing exactly what you are doing. 

2) Scale up by 20-30 percent. 

3) Open a new account for new trades to experiment with and measure.  

Did I mention Trader was *very* confident?  He should be. He earned the right to be. The stats verify that his trading has edge. The stats do not lie. The data is crystal clear. He is a trader with edge. No, he is a confident trader with edge.

So let’s say you are a new trader and do not have edge yet.  And you would not have trades to measure that would show profitability.  How would we go about solving that on our trading desk with new hires?  How can you solve that as a new trader?

Experiment with trading setups with edge.  Find traders who have edge, learn, experiment with, and measure your results with those strategies.  On our desk we teach new hires strategies being used by our successful traders on our desk.  We teach some of that in SMB DNA, at SMB Training, our education arm.  You can learn more about it in this free webinar, that also teaches 3 setups from our prop desk. Traders then experiment and measure their success with these trades.  The ones they trade with edge they build upon.  The ones they do not trade with edge, they discard.

True confidence for your trading is trading and trades proven through well-kept trading stats to have edge for you.

If  you are not yet trading with edge.  Think of the trader above.  Think of the solutions that you can make to your trading.  Because in time, you can be trading with edge.  You can be a trader who trades with confidence.

Summary 

  • Keep great trading stats
  • Tag, import, and measure all of your trades
  • Learn strategies from traders trading with edge
  • Experiment with these strategies and measure your results
  • Build your trading around the measured trades that work best for you

*no relevant positions

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