Five Key Questions Traders Need to be Asking

 

Five Key Questions Traders Need to be Asking

Here are five helpful questions that traders too rarely ask:

1)  What was the price path of what I was trading *after* I stopped out of the trade?  Does my exit execution actually add value?

2)  What has been the price path of what I’ve been trading after I entered the trade?  Does my entry execution have positive expected value, or am I better off entering in a rule-based, mechanical fashion?

3)  When I’ve added to trades, what has been the P/L just for those added pieces?  Does adding to trades truly add to my profitability?

4)  What has been the price path of trades I decide to not take because of lack of conviction?  Does my conviction in an idea truly correlate with the profitability of trading that idea?

5)  How does my P/L behave after I’ve had a string of winning trades?  A string of losers?  Does recent performance affect my trading, and–if so–is that impact positive or negative?

Tough to come up with answers for better trading if we’re not asking the right questions.  

Perhaps the best question of all:  How much time do you spend studying your trading vs. studying the markets you trade?

Further Reading:  Preparation and Success

Published at Thu, 16 Feb 2017 14:08:00 +0000

About the author

TheWire

Online resource for daily updates and information relating to investing stocks, bonds, forex, real estate and much more.