It can be really easy to fool ourselves into thinking that we have the best trading ideas…
When we first start out, most of us have a tendency to think that we are better traders than we actually are.
But then a funny thing can happen…
The longer we stick with it, the more we start to think that we are worse than we really are.
We beat ourselves up…
At least that is the way that it was for me.
I have had to go through such a long period of losing and now just breaking even, that I started to really doubt my trading skills.
So although I might have accumulated a ton of the right skills, I lacked the ability to trade with confidence.
If you have learned several trading methods already, and it feels like you are on the Trading Silodrome, then your challenges are probably mental.
I have talked with Walter Peters about this on several occasions (since we are currently recording a new podcast) and he has been a huge help in giving me the tools to overcome my current mental programming.
I have not been getting nearly enough.
This is just one small aspect of the course, but here is a technique that I am using to get feedback on my trading ideas.
There are three specific methods that I have personally found very efficient…
Note: This material is not directly from Chris' course. To get his techniques be sure to sign up for the course. He only opens it once or twice a year, so if you can find an opening, I recommend you take advantage of it.
How to Find Out if You Have Good Trading Ideas
Keep in mind that having good trading ideas, a good trader does not make.
However, how can you uncover patterns in your trading ideas, if you don't keep track of them?
You can't.
So here are three of the most effective ways that I have found to quickly record trading ideas and get feedback on them right away. For me, I try to record my first reaction to a chart.
1. Use TradingView
TradingView is a great charting site that does a ton of things right. I love their superclean web-based charting and the fact that you can chart stocks, Forex and other markets.
This site also has a fantastic feature that allows you to take a snapshot of a market prediction, then go back to it later and play the chart forward to see if you were right or wrong.
Some people use it to show how smart they are (or aren't), but I think that there are two, much more beneficial uses for this feature.
Blowing Off Steam
First, I think that most people have a tendency to invent trades that aren't there, just for the sake of trading.
I know that I am guilty of that.
Most of my drawdowns are a result of this. So what can you do?
Well, if you are not completely sure about a trade, or even worse…you haven't backtested it, then you can simply take a snapshot of your idea in TradingView, then go back to it later and find out how you would have done.
Uncovering Good Habits and Getting Honest Feedback
Second, putting your trade ideas into TradingView will give you a black and white record of how good or bad your trading ideas really are. Do your gut reactions really result in profitable trades?
Should you be pulling the trigger more often? Or is there a certain type of trade that is your kryptonite, and you should avoid at all costs?
Having this record of your trading ideas can give you the answer.
Keep in mind that recording ideas and actually trading them are two completely different things.
But taking a close look at your ideas and impulses can be a great start.
2. Use Evernote
Another way to find out if your trading ideas are profitable is to keep an idea journal in Evernote. I have written about creating a trading journal in Evernote before, but you can also use it for tracking trading ideas.
Here is how you would use it:
- Open Evernote before the start of your trading day
- Create a new note in your Idea Journal folder. Use today's date for the name of the note.
- As you scan your charts, make a note of every chart in which you see a potential trade
- Add a screenshot, so you can go back to it later and see exactly what you were seeing at that moment
This is very similar to the TradingView method. The one you use will just depend on which one you feel more comfortable with.
There is no right or wrong.
You might even want to try a couple of methods at the same time, to see what works best for you. Here is an example from my Evernote Idea Journal.
I record the following information:
- W = Watch list
- Currency Pair
- Timeframe
- Setup I'm watching
That's it! Super simple, but it makes it really easy to go back to your notes later and find out how well you would have done.
3. Use Metatrader Screen Captures
I'm a little embarrassed to say that I only discovered the power of this feature recently. But better late than never, right?
You can take a quick screenshot of any Metatrader chart by right-clicking on a chart and selecting Save as Picture.
Then select the following options. Add some notes about the chart to the text box at the bottom and when you click OK, the chart will automatically be posted to your MQL5 account.
If you don't have an MQL5 account setup yet, you can get one for free here. After you sign up, go into Metatrader 4 and put your login information into the Tools > Options > Community window.
Then, when you login to your account in a browser, go to Profile > Charts to see all the charts that you have saved. This is also a great way to record your trades for your trading journal.
Conclusion
So those are three, super easy ways to take an honest inventory of your trading skills and find out how good you really are. You have probably noticed that I have left out demo trading.
While this could be useful, I think that it is an extra step that you don't need to do, if you are only trying to establish a record of your trading ideas. You can certainly try demo trading, if you think it will help, but I think you will find that this process gives you much faster and more practical feedback.
Periodically review your Idea Journal and see how many of your predictions would have worked out. Don't beat yourself up for missing trades, just accept it as it is and move forward.
Again, recording your trading ideas can be a very useful exercise, but it really needs to be done within the context of an overall trading psychology improvement program.
You may not have to do this forever, but until you are successfully profitable, this can be a very useful exercise.
It's a real confidence booster.
