This market is getting a little tricky right now… and I think it’s important to be able to remain nimble and adapt.
There are so many different catalysts on the table…
And if you don’t adapt and have other strategies in place… you may run the risk of getting left behind and not being able to trade another day.
If you can’t pivot, you’ll be left in the dust…
The market is always changing, and those who are successful are able to adapt to the conditions.
Today, I want to show you two ways to adapt and potentially evolve as a trader…
I believe the top traders are constantly evaluating their trading performance, and checking to see what adjustments and tweaks they need to make to maintain a high level of performance.
Two Ways To Adapt And Evolve As A Trader
Whether you’re trying to improve by refining a strategy or learning new ones… there are two ways to do that, by journaling and paper trading.
Now, you might be thinking, “Jason, how are journaling and paper trading going to help me? I thought trading is all about making money.”
Well, when you’re developing new trading strategies… you probably don’t want to put real money behind those trades just yet.
Those strategies haven’t been proven, so like in business, you have to show proof of concept first.
That’s where paper trading can help you.
If you don’t know what paper trading is, you’re using “play money” to trade. In other words, if you’re testing out a strategy and take a few losses, it won’t affect your real trading account.
However, a lot of traders who start paper trading just treat it like a game… doubling down when a stock moves against them… buying a ton of shares, which isn’t realistic to their actual account size… not planning or journaling.
If you’re going to do it… Take it seriously.
You’ll want to treat paper trading like it’s your actual money.
For example, if you have a $10,000 trading account then paper trade a $10,000 account. You want to try to mimic a real life trade setting.
However, it’s not just all about paper trading… it’s also about journaling and keeping a log of your trades.
Tracking Your Performance
How do you know if you’ve improved as a trader if you don’t track your performance?
Sure, you can use your PnL statement to see how you’ve been doing, but that doesn’t give you an idea of what’s been working and what hasn’t been.
You see, journaling actually gives you a deeper look into your performance – allowing you to refine your strategies… and figure out whether you should start putting real money behind your new strategies.
So what do you include in a journal?
Well, for starters, your journal should include things like:
- Total profit and loss (PnL) for the day
- Number of times you traded
- Which strategies you used – were they based on a specific chart pattern, indicator, catalyst, or fundamentals, etc?
- Sleep and exercise habits, diet, etc. These factors affect your performance, especially if you don’t get a good night’s rest.
Now, when you’re writing about specific trades, you should include:
- PnL for the trade.
- Stock symbol, date and time for entry and exit, chart of the stock.
- The reasoning behind the trade. Why did you get into the trade, was it based on a specific strategy, a pattern you like to use, etc.?
- What you have done differently and how you could improve the next time you see the same setup.
Once you have some journal entries… it’s important you review them to try to find patterns of how you could refine your strategy.
For example, maybe you find that you’re leaving money on the table on your trades because you take profits too quickly. Then you can develop an exit plan strategy and see whether it works…
… or maybe you find a new strategy that’s working… and realize you can finally put it to the test.
Now, if you’re looking to for strategies to potentially trade… I have 3 that I believe put me in a position to succeed. By combining them, I can adapt and focus on the ones that are working.
Click below to find out what they’re all about.