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10 Ways To Dominate Your Trading in 2021

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10 Ways To Dominate Your Trading in 2021

As a trader, you might reflect upon your outcomes of the past year. You might have struggled in 2020, but there’s always a chance to improve. The new year brings you this opportunity so that you can set fresh goals, change your mindset, and dominate your trading. In the year 2021, you can get rid of the habits that inhibit your progress and change the way you approach every trade. Thus, you can surely enhance your trading in the new year ahead.

It does not matter whether you are a beginner in trading or you are having 10 or 15 years of experience in this field, all of you need to write down their goals, and commit to them at the start of the year and throughout the entire year. As your knowledge and trading skills would have been increased from past years, it’s important for you to update your trading plan.

Learning from your past mistakes and editing your trading plan is something you should do time-to-time to improve your trading.

Many things have changed drastically over a while, but one thing that has remained constant over these years is the psychology of the market participant. As the markets and the psychology of the market participant will never change, the principles which we are going to discuss here won’t change either.

Work on the one trading strategy or chart pattern until you master it

In this year, you should strive to master your chosen trading setup instead of focusing on some trading strategies. You should study and trade just a single price action signal or price action pattern. When you get very good at your chosen setup and succeed over a large series of trades, you can then master another additional price action signal/price action pattern.

Also, you have to get rid of the temptation to change trading strategies. Be faithful to this one single idea and follow it until you succeed in it.

Try to spend more time learning about trading rather than just trading

When I was a beginner in this field, during the market hours my entire time was spent watching the screens of my computer, watching open trades, entering and exiting trades. And because of this, I had no control over my emotions in my early days of trading.

Unfortunately, many traders commit this same mistake. They spend all their time on the charts looking for every trading opportunity. You should not think for a moment that as you are intelligent or you have achieved success in many other aspects of your life that you can’t become addicted to trading, this can happen with anyone.

If you spend all your time on the charts looking for trading opportunities or your current positions you are soon going to end up blowing up your trading account.

Instead of spending more time on the charts try to spend your time learning new things about trading. This will help you to become a better trader and eventually you will see improvement in your trading performance.

Do not predict the direction of the markets

You may know this thing, but you analyze the market with two different points of view and these are- 1) your current open position and 2) The position you are going to take.

Traders make this mistake because they are programmed to have an opinion about everything that is occurring or that is about to occur.

For example, If you buy the stock of Reliance today and it suddenly goes up and on the next day you see the news article which says that the reliance is planning to acquire a certain percentage of stake in other company and because of this there will be the hike in reliance price and after listening to this you feel more confident.

The second example would be the opposite of the above example:

Suppose if you buy reliance stock today and it suddenly goes down and you start panicking. And suddenly news drops that reliance has cancelled his plans and will not acquire a stake in that company and because of this the prices of the reliance stock will probably go down, and after listening to this you start feeling even worse.

Now, I want you to ask a question, Did reliance stock go up or down? Or the news events about the reliance stock had any impact on your entry and the setup you used to take the entry? And the answer to these questions is ‘NO’. But yet most of the traders will develop an opinion because of this news.

What you need to understand here is simple in theory but it takes a lot of practice to apply it in real markets. You must take every decision be it your trade entry, exit, or any other thing in between with 100% neutrality. You should not get attached to your existing positions. you have to control your emotions if you want to master the financial markets.

Next time when you are entering into the trade don’t listen to external factors like news channels, articles, or telegram calls. Don’t ever look for the information which conveys to you that you have taken the right decision about your trade. Have faith in your trading system and trade according to your plan.

Have patience

Patience is very important in every aspect of your life. Without patience, you can’t become successful in any field. As Warren Buffett says “ the stock market is a device from transferring money from the impatient to the patient”.

To get big rewards in trading, you have to hold your trades way longer, to the point where your system gives you an exit signal. Don’t get frustrated while trading, let your trades play out. Also, don’t get bothered by short-term volatility in the market, try to hold your trades as long as you can, and always trail your stop-loss to protect your profits.

Do not miss the trade if your system gives you an entry signal

We all miss the big opportunities, but it’s how many of those big opportunities you miss in a year that defines your profitability as a trader. Most of the traders wait for the perfect opportunity and when that opportunity comes they don’t enter in a trade, they freeze. If you observe carefully, a lot of these missed trades will often turn into great winning trades.

Each trade has a random outcome, no one can decide whether a particular trade is going to make a profit or a loss. You have to keep in mind this reality to build your confidence and you have to take most of the trades when your system gives you an entry signal. So, whenever your system gives you an entry signal don’t be blank, take that opportunity and try to trade with your trading edge.

Exit your trades at the right time

Apart from missing good trading opportunities, many traders miss their profit targets by a few points or their winning trades turned into losing one’s because their target was missed by some points and then reversal happened from that point.

Here are some solutions for that-

  1. Exit the trade a few points before your planned target level. Whenever you think of deciding the targets, try to place the target order slightly below some of the major resistances/supports or key indicators. This might help in filling more target
  2. You can decrease your Risk to Reward ratio for some For example, Instead of trading 1:2.5 or 1: 3 risk-reward ratio try to trade for 1:2 or 1:1.5 RR ratio for the next 10 to 20 days. By doing this you will get confidence by hitting some targets consistently. Make sure to monitor each trade to check how far it went when you exited the trade, this will give you a brief idea about how much further you can increase your target levels in near future.
  3. Taking smaller profits will not make you a profitable trader in the long run but because by performing this exercise you can learn a lot about how you can set up your targets.

Pre-define your risk per trade

Capital management is a crucial topic that will help you in the long run. Traders fail miserably when they don’t manage their capital properly. Pick a fixed ₹ risk per trade and stick to it unless you are sure that you can make money over a long period. Do not attempt to risk more money over the next trade than that of the previous trade.

Use a fixed amount that you have previously decided in your trading plan unless you have created your own profitability record and you are confident enough to risk a larger amount. Until then, do not drift away from that fixed amount.

Always review what you did well

I know you all would have gone through ups and downs in 2020, but there is something always positive to take out. So, start making notes of all the things you did well from this year. This will help you in keeping the track of things in which you are strong. Staying disciplined over a year is a very difficult task.

So, even if you stay disciplined in some aspects of your trading, your results will be positively impacted by this.

Always review what you did wrong

I want you to ask one simple question- what mistakes did you commit over the last year and how you are going to fix them? Generally, traders repeat the same mistake over and over again. They fail to take a lesson from the mistakes. So you have to make the change this year. You have to note down every single mistake you make while trading.

Once you start reviewing what you did wrong, it becomes very easy for you to trade because now, you have already known your mistake and you can correct it. Most of the trading mistakes can be easily avoided by self-control and following your trading plan. This is how you can run trading as your business.

Update your trading plan regularly

Last but not the least, if you want to make progress in your life as well as in trading you must update your plans regularly to reach your destiny. Trading is a life-long journey and you have to update your plan from time to time if you want to become a profitable trader in the long run.

Errors like; committing the same mistakes repeatedly, risking too much on a single trade, taking an entry without a valid signal, entering and exiting trades because of greed and fear can blow up the trader’s account. So, It’s very important to protect your capital and for that, you have to update your trading plan regularly.

Conclusion

I hope today’s article gave you a brief idea about how you can improve your trading skills this year and which things you should change to dominate your trading in 2021. If you make a detailed trading plan, if you have control over your emotions and if you maintain discipline then and then only you can be a profitable trader there is no other way.

Now I am going to ask you a few simple questions please take a look at them and give your answer in the comment section.

  1. Which mistakes did you commit in your trading over the last year and how you are going to fix them in 2021?

  2. Which things you are going to update in your trading plan?

  3. How much time do you spend learning about trading rather than just trading?

 

Please post your valuable answers in the comment section. By doing this, you are not only helping yourself but also you’re helping your fellow traders by letting them know that they are having the same problem as you have and they are not alone in this problem.

8 Comments

  1. Mistakes i did in last year are
    1. wrong exit
    2. more dependency on indicators
    3. Exit or entry in FOMO
    4. Not have faith in my system

    I remove all this mistake this year and for that
    I m working on my trading habits and life habits..
    I regularly do meditation from last 4-5 months and will doing for life time.
    I will devlop my confidence in my trading system and have faith in it.

    I will not enter into a trade or exit a trade based on my feelings.

    I will definitely do this bcz i have faith in my self

  2. Well written with your experience and it will help us if we understand and implement…..thankyou….well written…..

  3. 1. Stop over treding 2 s.l per day fix.

    2. Only take high probability trade otherwise ignore treding.

    3. 2 hours learning every day without skip.

  4. 1) Mistakes commited were: No proper risk to reward. Jumping in and out of trades due to fear and greed. Not having a defined trading plan. Biggest was exiting my winners quickly in option buying which is a big big mistake.
    2) Things have already been updated. Certain tweaks are always required but they surely come with experience and experience only.
    3) Reading 1 book every month on trading and spending a lot of time researching and reading articles. So maybe 4 hours a day.

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