As traders, we need to be constantly evaluating our performance.
Think about top-tier athletes…
Do you think Michael Jordan reached the career heights he did by lazily phoning it in? Of course not!
He practiced constantly, both on and off the court. Not only that, he was always trying to analyze and improve his game — even when he was the best in the world.
The best traders I know have a similar work ethic, forward drive, and ability to self-reflect…
They’re not afraid to look back at rough patches in their trading and fix the problems that led to losses.
And by doing so, they can identify their weak points and eliminate them for good.
On the other hand, I’ve seen other traders string a few wins together and get complacent. They thought they were hot stuff after a lucky streak and didn’t self-evaluate.
Spoiler alert: They went back to their day jobs.
Don’t be like these guys.
It’s not that hard to keep yourself in check, you’ve just gotta follow a few simple steps…
Keep reading and I’ll show you how to check yourself before you wreck yourself…
Set Goals (and Hold Yourself Accountable)
I want everyone to think about the following question…
What are your goals for this week, this month, and next year?
Now, write them down!
Then, when the expiration date of your goals comes around … hold yourself accountable.
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Did you accomplish what you set out to do?
- If the answer is yes … what were the contributing factors to your success? How can you assure you’ll consistently repeat that performance moving forward?
- If the answer is no … what prevented you from achieving your goals? And how can you improve upon your performance?
My top student, Jenny Smith, is a shining example of how traders can improve upon their early mistakes to become unstoppable.
When Jenny started trading, she was quickly humbled by the market after losing $3,000 on her first few plays.
Did Jenny give up? Of course not!
She immediately realized her problem — she was following scammy stock promoters on Twitter.
Jenny knew she needed to switch gears, and that’s when she discovered Tim Sykes and Evolved Trader.
The rest is history. These days, Jenny’s husband calls her his ‘sugar mama!’ (Click here to learn all about Jenny’s incredible trading journey!)
Go Over Your Trading Journal
You might be wondering … where should you be taking these notes I’ve been talking about?
In your trading journal, of course!
I wrote an entire letter about what to include in your trading journal,you can read it right here.
That said, I’ll briefly remind you why it’s so important to keep a trading spreadsheet of some sort…
If you don’t track your trades, it’s very difficult to get a big-picture view of your overall performance outside of the limited information your brokerage platform provides.
But by simply taking a few notes about every trade you make, you’ll be able to see trends in your wins … and even more importantly, in your losses.
Over time you’ll get a better understanding of how different factors affect the ultimate outcomes of your trade decisions.
For example, you may notice that you have more success trading puts than calls … or that you profit more when you hold your positions overnight (as opposed to buying and selling intraday).
If you’ve been keeping a trading journal, you should regularly go over it. Otherwise, it’s useless.
See if there are any common factors among your losing trades. If there are … squash them!
And if there are any common factors in your winners, work on maximizing them.
It takes humility and maturity to look yourself in the mirror and be honest about all aspects of your trading.
But this is an absolutely critical part of being a consistently winning trader.
If you don’t regularly check yourself — you could potentially wreck yourself.