Narrow your focus | stockbee


Narrow your focus

If you want to improve your trading first thing you need to do is narrow your focus.

Trade one or at best 3  setups. More setups you trade less likely you can do full justice to all of them. The time you spend on running scans , analysing , selecting trade, managing trade increases exponentially as you start trading more setups.

One of the reason people do poorly is because they just can not focus on specific setup. Once you eliminate all kinds of setups and focus only on one or two setups you will quickly find results. You will start to gain expertise in your setup as you start to focus more on nuances of it. You will start to tweak things within a very narrowly defined setup.

Every study on expertise development shows that narrowing the domain is best way to quickly develop expertise. It allows you to develop specific set of skills. Narrower your focus easier it is to trade. Every week think of how you can further narrow your setup definition and things you do.  Get rid of unwanted and marginal ideas.

Why do traders flirt from one thing to another or trade multiple methods? Because they lack confidence and expertise in one setup and feel someone has better setup. Because you get exposed to new setup you feel you must trade it.

Sacrifice is required if you want to be profitable. You can not trade all kinds of stocks and all kinds of setups. If someone is selling you that as key to success in trading hold on to your wallet.

Highly profitable traders are highly specialised.  Traders who focus on growth stocks only focus on growth. Traders who focus on momentum only focus on  momentum. Traders who focus on shorting only focus on shorts. Traders who focus on options only focus on options. Value investors focus on value stocks. Turnaround traders focus on turnaround. Day traders focus on day trading. Traders who focus on high priced stocks focus on high priced stocks. Traders who focus on low priced focus on low priced. Automated strategy traders focus on auto trading. Mean reversion traders focus on mean reversion.

Stop the stupidity and spend this weekend narrowing your focus to only 1 or 2 setups. Get rid of all kinds of clutter in trading. Focus on few things and do it well. Let others waste their time on multiple setups and style.

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