Trading Psychology - The Importance of a Little TLC

January 19, 2023
Weekly Trading Insights

Trader TLC

Take some time to relax

With the new year approaching, the holidays finishing up, it's important to take a moment to chill out a bit and relax. 🛀

Here's some things you can do this week to help you feel better going into the next year...

🔘 Exercise

  • Try a new routine or pick up the pieces on an old one. 💪
  • Ever try pilates? Hot yoga?

🔘 Meditate

  • Even for just 10 minutes a day 🧘

🔘 Get a massage

🔘 Pick up a new hobby

  • Golf, fishing, cooking, poker, photography. Anything been on your mind to try?

🔘 Connect with a friend

🔘 Plan ahead

  • Buy a planner and set your agenda for 2023 📝

🔘 Create a budget for next year 💰

🔘 Set goals

  • New Years Resolution anyone?

🔘 Reflect

  • How did things go in 2022? 🔎

Dear TradeZella,

How can I strengthen my traders' intuition?

Traders' Intuition. We all want it. Only some of us have it. 🙌

Some may argue that it's a trader's most valuable asset. 💡

Traders intuition can be described as confidence gained through a thorough understanding of markets.

It may serve as one of the elements of confirmation when making trading decisions. 🧠

Trading intuition is something that all traders strive to possess one day.

Like most components of a professional trading system, it’s typically something that comes with experience and time.

Trading professionals describe trading intuition to be almost like a “gut feeling” you get.

🔑 You start to perceive market conditions in a way that aligns with your trading system.

🔑 You start to see the overall market picture more clearly

🔑 You feel “in the zone”.

🔑 You begin to understand what works and what doesn’t with your setup.

🔑 You start to notice which players are in the market- whether institutions have checked out, algos have entered the chat, or a short squeeze might be in play.

If you ask Umar Ashraf, (Founder of TradeZella and Professional Trader of over 9 years), he’d describe it as something that “comes with trading well for a period of time”.

“You start feeling things. Not that you’re right all time, but most of the time.”

What else can be achieved with a good traders’ intuition? 💡

Well, for starters... professional traders say that it can help them during situations where price may not run fully to their profit target.

So, they’ll take profits earlier than initially planned to avoid a reversal in price action.

With this, professional traders are able to tell whether or not they made a mistake or played it smart.

They'll know if they exited early out of “fear of holding on” versus exiting the trade when market conditions are hinting that price will likely reverse them out of a trade. 🕵️

Umar mentions,

“You start to guide yourself. You can save yourself money when you feel that positions will go against you.”

Let’s discuss how we can get closer to achieving traders intuition.

It’s important to remember that developing strong intuition as a trader can be challenging process, but with strategies in place, you’ll put yourself in a good position to achieve it.

Practice + Experience

The more you trade, naturally, the more opportunities you have to observe market trends, make decisions based on your analysis and adjust your trading strategy accordingly. 📊🚨

Now we want to make a point here…

This doesn’t mean you should take a bunch of random trades that don’t align with your setup just to “gain experience and screen time”.

No- do not do that. ❌

Instead, understand that an accumulation of this practice and experience will result in delving deeper into in sense of market behavior. ✅

Study the market

This goes hand in hand with the above. ☝️

Give yourself time each day to simply study the markets. 📝

If you find that you’re overtrading by trying to gain experience, here’s a tip…. 💡

Trade your strategy as you see fit. Take the trades that are within your setup, with good volume and confirmation.

Once you feel like you should end your active trading session, close your execution screen and simply watch what price does around your key levels. 👀

Look at the tape, try to understand the market context, see what the market sets up. 🕵️

If you like, you can write down what you think might happen at a critical level based on your analysis and then check to see if it plays out based on your intuition. ✍️

Can you spot a fakeout before it happens?

Use the market comparison feature within TradeZella if you like to trade names with a high beta correlation, meaning that they move with some level of influence from the overall market.

TradeZella's Market Behavior Feature

Keep your thoughts, predictions, and analysis in your trading journal.

Use the Notebook feature in TradeZella to add a notebook and title it “Intuition”.

At the end of the week, you’ll be able to go back and see if your predictions and studies were right.

Pair your analysis with Trade Replay

Replay your trade and watch how the tape played out at the critical levels you set. 👀

Where did strength and weakness show through? 🧐

Look at the speed of the tape and amount of volume that does or doesn’t come in. 📊

See if that fakeout that occurred was present in the tape.

How does your plan align with what actually happened? ⚖️

The more accurate your plan is, the more accurate your intuition is about the markets.

If you find your plan to be accurate, refine the conditions to see if a better trading system can be developed. 🛠️

Once your system is refined and developed, start to place trades based on your findings.

Use small size and don’t go outside of your “intuition”. ✅

You’ll start to see that your intuition was built over time and you might even be onto something. 👀

Use this framework to continue understanding the markets and continue making improvements. 💪

As you act on this intuition framework, you’ll become more and more confident in your trades and eventually reach the point where you have a pulse on the market. 💓

As we talked about, it’s important to remember that, your intuition isn’t a 100% correct indicator, but more of a guide to be used across a series of trades. 🗺️

With a good traders intuition, you’ll be right most of the time, but not all time.

That’s all for now!

Enjoyed this week’s content?

Reply to this email and tell us what other topics you’d like to see.

Until then, we'll see you next week!

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