As the recent post illustrated, what we call a "trading process" is actually a number of interwoven processes that push us to exercise our abilities. Idea generation alone may have us analyzing historical information; synthesizing information across markets; consulting market research and valued market participants; and making sense of shorter and longer-term patterns of price, volume, volatility, and more.
Once we've generated the idea, there is the work of defining and structuring the trade to achieve best risk/reward; establishing position sizing to best meet risk management goal; assessing moment-to-moment action to identify sound entry and exit points, as well as points for adding to positions or taking pieces of our trades off. Notice that all of these processes require:
* Sustained focus/concentration;
* Deep, broad, creative thinking to assemble information into ideas;
* Fast, flexible thinking to execute sound trades;
* Personality strengths of conscientiousness and emotional balance.
When we treat our trading process as a gym with many workout stations, we build a sense of inner strength, growth, mastery, and confidence.
A poorly defined, simplistic trading process reinforces laziness and fails to build us cognitively or emotionally. We internalize what we do. What we do day after day in our trading preparation exercises the strengths that contribute to a strong trading psychology. When our processes are grounded in our strengths, the efforts of workouts are fulfilling, not taxing. There is no challenge as important to developing traders as that of defining processes grounded in our particular competencies and strengths.
Further Reading:
How Developing Traders Are Most Likely To Succeed
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