Learning to Trade pt3

In part 2 I tried to speak about the importance of trading in your own vision. In this final part, I wanted to talk about ways we can refine our vision and edge.

(Links to part 1 and part 2 if your interested)

play like an amateur; enjoy the game

Ultimately this is a zero-sum game, so you must enjoy the competition! To do this you need to go beyond the one dimension of your own game. Your opponent is always going to have a completely opposing view to yours. They are going to try and run your stops and make you doubt your strategy everywhere they can. They will do this wittingly, purposefully trying to throw you off your game and unwittingly, by simply being true to their beliefs. So you need to...

1. learn your style's strengths and weaknesses
2. understand how and where others will try to implement their style and exploit yours by getting into the habit of seeing every trade from both a bull and a bear's perspective 

Once you start to develop this broader view, you will begin to compete intelligently rather than emotionally. Win or lose, you will build self-respect and confidence, because you're playing the game for what it is. If you lose, you gave them nothing easy, if you win, you took part in making the trade a success. Amateurs understand and enjoy these battles and accept that losing them from time to time is the price of competing. In fact, more than that, they say "well done, I see what you did there"or "tut" at themselves for failing to do something they know they should have. It does not throw them off their game, it only makes them enjoy it more. Because this is the game.

Personally, I believe I am just about at this stage.

the pro: never stops learning 

Now the following is purely conjecture as I am certainly not at this stage but as I understand it; where the Pro differs from the amateur is in their acceptance that they will always be a student of the market.

One thing I would say with a little more certainty is, again, that as I understand it, this where the serious back-testing should commence if you're so inclined. I say this because this is what my coach has always alluded to in his instructions which to paraphrase were: Find a system that you understand, forward test it to see if it suits you and to learn some KPI's, as it's starting to fall into place come and see me again so we can review it  and you can spend some time backtesting to further refine your edge/KPIs.

We can continue our education by.

1. Continuously recording our data and learning our KPIs
2. Continued studying of the world and market events
3. Journalling our trades and thoughts and exploring them
4. Getting independent input and coaching in regards to our strengths and weaknesses
5. Start comprehensive backtesting to further extend our KPI knowledge and insights into our method. My buddy has written a great post on backtesting on his blog
6. Work with other traders to help, test, push and encourage good habits, better practices and fresh ideas. Something I was thinking about in a previous post on building a Trade Team