Stop flirting from setup to setup
Stop flirting from one setup to another.
Stop flirting from one time frame to another.
Stop flirting from one indicator to another.
Stop flirting and do the same things for months till you get nuances of it.
In a day or a week you will be exposed to many new trading ideas and setups. Just because someone mentions IBD you do not drastically alter your setup and chase the new new thing.
For beginner traders this is a challenge.
Because many of us at beginning do not know what works and what does not work, we are susceptible to try every new thing. We are also gullible and believe anything and everything.
If there is market direction change or few failed trades we start flirting with other things.
The proliferation of blogs, books, forums, Twitter and all kinds of media creates constant temptation to flirt from one trading ideas to another.
Everyone is out to market there approach as the best approach with carefully selected examples to make their case.
If someone highlights a trade then everyone runs to it.
If some new book comes in everyone gets excited about it.
In the process several things are cursorily tried but no expertise is developed in one type of trading style or setup.
If you look at the month gone by and do honest self appraisal you will find that some of you have spent the month doing this.
A trading idea or setup is just a idea and unless you think deeply about it and convert it in to process it does not become part of your procedural memory.
Your task as a trader is to develop procedural memory.
If you want to trade say breakout you need to develop procedural memory for trading it.
That would involve your ability to run the entire process involved in breakout trading like scanning, identifying good setup from scans, putting stop, determining position size, determining target, exiting, and so on.
This is all part of procedural memory development challenge.
Similarly if you want to trade a IBD method first you need to develop a process flow and follow it for months or years before you hit jackpot. Most IBD kind traders take 2 to 3 years before they start making big money.
Simpler process flow like momentum burst are easier to follow and offer you a ready made template. That is why there is so much focus on process orientation on members blog. Every setup has to have well designed process flow that is transparent and easy to follow. You will see that my daily posts are constant reminders of process flow.
Procedural memory only develops after a considerable amount of doing same thing again and again using same step by step process. By doing that you develop procedural memory which becomes permanent part of your memory.
If you constantly flirt from ideas to ideas you will never develop procedural memory.
Individual trades do not matter. Learn process flows. If you learn process flow you will be able to replicate a trade or understand what is involved in finding a trade.
Once you understand process flow you will be able to build your own process template and make it efficient.
Process orientation is extremely important for developing procedural memory. Procedural memory is a memory of a procedure. It is stored in your brain as one muscle sequence. In a flash the brain can then recall entire process.
Once you become process oriented the cognitive load will decrease. Follow traders and people here or anywhere else only if they are transparent about their process flow.
Developing procedural memory is the key to becoming successful trader. Procedural memory is built through repeated practice.
But before you get to repeated practice you should have right process. Else you become good at wrong process and then you need to erase those procedural memories and rebuilt right procedural memory.
Procedural memories are enduring memories and we do not forget procedural things easily.
If you learned to ride a bike as child it becomes permanent part of you. Same way once you develop a setup specific memories they become permanent part of you.
Most of the ideas you will see around you in trading are rehash of some few basic ideas like breakout, pullbacks, pivots, mean reversion, breadth, trend following, momentum, growth investing , value investing, contrarian investing .
Take any of these ideas and convert it in to process and trade it for months till it is part of your procedural memory. If you wake up in the middle of the night you should still be able to do the process blindly without thinking.
The way procedural memory works is by embedding a muscle or thinking sequence in your memory. A complex task involving say 25 steps is stored in procedural memory as one unit (schema) and when performing the task it is recalled in an instant.
The more you focus your effort on process flow and developing procedural memory you will realise much of challenge in trading is not about intellectual tasks and learning new things, but it is about finding a niche setup and perfecting it to a level where it becomes permanent part of you.
That is pretty mundane task.