The typical new year resolution yields absolutely no results whatsoever. So instead of learning to fly a helicopter, going on a diet or hitting a four-plate bench-press, try opting for something a little more pragmatic. Here are five new year trading resolutions:
We’ve all been there. Sometimes it can feel like the entire world is conspiring to stop you from making money. Somehow every trade seems to go wrong, in a way that seems astronomically implausible. You go long only to find you sniped the absolute top with microscopic precision. You abandon the trade to go short and by some miracle the trend reverses again the instant you place the order. If someone were to do the exact opposite of your trades, they would be unfathomably rich. The market is mocking you. You are the ultimate counter-signal. Everyone point and laugh.
Of course, none of the above is true, but it can definitely feel like it. Take a step back from the screen. Get some air. Calm down. As much as we like to pretend otherwise, most of the time we are not rational creatures. Sometimes the best thing to do is to walk away and come back another day with a clear head.
A lot of traders refuse to give up on a bad trade. We stubbornly cling on to a position in the hopes of extracting something out of it, deluding ourselves into believing we can get out of a massive drawdown. We hang on like grim death, adding funds to push the margin call just a little bit further away. 90% down on a position? No. Everyone else is wrong. I’ll show them. I’ll show them all.
The truth is that even if a trader does manage to claw their way out of a sticky situation, trading and swap fees can quickly eat away at any profit. More importantly however is the opportunity cost of hanging on to a bad trade. The margin tied up in a losing battle could probably be used to much greater effect if it were deployed elsewhere. Revenge trading rarely leads to anything good. A bad trade is like a bad relationship. Better to rip off the bandage and move on.
This one sounds easy but almost no one actually does it. The whole point of writing things down is to hammer home what went right and what went wrong. Why did this trade go badly? Write down the reason. Learn from your mistakes. Much harder to ignore failure when you have to settle down and justify it.
This has never been easier. There are a bunch of online trading journals that will synchronise with your trading platform and provide a detailed analysis of your performance. This will allow you to identify recurring errors and eliminate them. A lot of the time a trader may have a winning strategy but fail anyway because they don’t stick with it or simply because they close trades too early. A journal will help rectify this.
An alternative is to physically write down your trades. Pen and paper. Bring forth your inner aristocrat. Go and buy a leather-bound ledger and a quill. Like Ebenezer Scrooge.
There are times when pushing forward in the face of adversity can be very rewarding, but when it comes to trading this is usually not so. As hard as it is to admit, sometimes we are just wrong. We may have worked hard on carving out an advantage, carefully tailoring our system, perfecting it, adopting it. We grow attached to it. Unfortunately, if a certain strategy fails more often than it succeeds then it needs to be mercilessly abandoned. As someone may or may not have said: “insanity is doing the same thing over and over again and expecting different results”.
The world of trading is not an isolated ecosystem. It is easy to fall into the trap of thinking that market movements are totally detached from reality but this simply is not true. Entire books of intricate trading setups will be swept aside in an instant should a significant financial event suddenly hit the newswires. A surprise interest rate decision? Poor non-farm payroll data? A sudden declaration of war? Kiss your setup goodbye. The Federal Reserve laughs at your Elliott Wave analysis. Tanks are being loaded onto military cargo planes as we speak. Get those candlesticks out of here.
Like many other aspects of your trading journey, this is something we at RADEX MARKETS can help you with. The economic calendar and regular financial news updates we provide will put your trades into context and give you the bigger picture. Here’s to a successful 2025.
Risk Warning : Trading derivatives and leveraged products carries a high level of risk.
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