Introducing Structure into Your Trading

Trading is a profession which requires you to flawlessly execute your trading strategy over and over again in the markets. To succeed in trading you must understand that it's a game of probabilities in which you need to have an edge which is executed consistently over a large sample set of trades. Consistency in trading can only be achieved if you apply a structured approach to your trading. 

Just as a professional sports team such as the All Blacks have structured systems relating to trainings, team meetings, gym sessions, physiotherapy sessions, pre game warm-ups, post game recovery sessions and even the team bus seating arrangements (subject to seniority), professional traders also need to employ structured systems so they can achieve consistency in their trading. These include and are not limited to tasks such as your scanning technique, trade order generation, trade record keeping, monitoring your trading psychology, risk management techniques and post trade evaluations. Let's run through how you might like to structure some of these tasks in your own trading. 

A structured scanning technique is one of the most important structures to build into your trading routine. How you choose to scan the markets directly affects which trades you take. You need to work out a consistent scanning technique which you can apply to the markets at consistent times throughout the day. An example of a scanning technique might be for Trader A to scan through the daily chart of 30 different products he/she trades. If Trader A notices a daily chart with clear momentum and direction then they will investigate all other relevant timeframes in search of a valid trading strategy setup. Each day this daily scan is repeated at 7am and usually takes about 30 minutes to complete. That's the type of simple, structured and consistent scanning technique which you could build into your trading routine. 

Emotions and psychology are a crucial aspect to successful trading as they can make or break a trader, therefore all traders should work in a structure which looks to manage and monitor their emotional capital or trading psychology. It may sound like a tough aspect of trading to master, but actually there are some really simple techniques you can use to help you with your emotional capital. What we suggest you do is each time you place an order in the market just write down a quick note in your trading diary explaining how you're feeling at the moment you place the trade e.g. I took a long time to put my entry into the market as there was indecision in my mind, now that the order is live I'm stressing that I'll get stopped out and lose money. These types of observations which you can record with every trade you take can provide you with huge insights into how your minds working. You can also note down how you feel while in a trade and then how you feel after the trade has completed to gain further valuable insights. 

By adding structure into your trading you can start to develop a consistent approach which leads to valuable insights into what areas of your trading might need to be improved upon. Keep in mind that you must keep your structures as simple as possible to ensure that you actually execute them day in and day out. 

Happy trading! 

The TWP Team