Sunday, March 12, 2017

Three Tools to Improve Our Trading Performance

If we internalize everything that we do such that all that we do acts as training, then it makes sense for us to train as intelligently and purposefully as possible.  Here are three tools for training traders that have the potential to shape our future performance.  (Please note that I have not received any incentives or compensation for mentioning these.  The companies have no clue I'm writing this, which is how I like to keep it).

1)  TradingSim - I've long advocated the use of simulated trading as a way of practicing pattern recognition for active traders.  What makes TradingSim unusual is that it is entirely web-based (no software to download) and the data are included in the subscription.  You can simulate trading any day over the past two years and the simulator will replay that day with any symbols and technical indicators you choose.  You can view multiple charts simultaneously, and you can speed up the replay or advance bar by bar.  You place your trades on screen and the program tracks your P/L and historical performance.  Great way to review the day; great way to practice trading for developing traders--or for experienced traders testing new strategies.  One unusual feature for daytraders is that the biggest moving stocks are displayed, so that you can trade what is moving.  Longer time frame traders can use the simulation to aid their entry and exit execution.

2)  Headspace - Some smart traders I'm working with are using this program and app, which teach meditation and mindfulness.  There is research supporting its use, and a blog addressing various topics related to work on mindfulness.  The platform is web-based and easy to use, with a guide that walks you through meditation exercises, some of which are tailored to particular needs including relationships, performance, and health.  There is a basic foundation sequence for new meditators and also longer, more detailed exercises to build mindfulness for more experienced users.  The app keeps track of your progress and structures your learning, so that Headspace truly becomes a workout routine.  The program will even send calendar reminders to ensure that working on your head is built into your day.  It's a great way to stay actively engaged in meditation work without having to join a class.

3)  BrainHQ - This is quite an unusual program and app that trains specific brain functions, such as memory, attention, and visual tracking.  It's backed by considerable science, and all the exercises are web based so that they can be accessed from any place, any time.  The exercises can be tailored to various levels of difficulty.  The program keeps score and enables you to track your progress.  It calculates your skill level and sets parameters that ensure that you're always challenging yourself at your threshold.  I am not at all proficient at hand-eye coordination tasks, so these are unusually challenging--and frustrating!--for me.  One of the side benefits is that the work on the tasks builds not only attention/focus but frustration tolerance.  If you're interested in cognitive exercise, it puts you through your paces!

What we're seeing is the next generation of tools to build successful traders.  It's one thing to write in a journal and talk with a mentor/coach about trading mindfully or sticking to your best trading rules.  It's another thing to actually work each day on mindfulness and actively practice trading with those rules.  Taken together, these kinds of tools form a kind of performance gym.  Talking to your basketball or football coach doesn't substitute for getting in the gym and engaging in the drills that lead to better conditioning and sharper skills.  Similarly, speaking with a mentor or trading coach can't substitute for hands-on skills building.  These are great ways to build trading-relevant skills without putting your capital at risk.

Further Reading:  Using Metrics to Boost Trading Performance