TRADING ASCENSION

Unlock the Hidden Secrets: How to Set Up a Trading System & Radically Improve as a Day Trader and Achieve Unbelievable Success!

If you read the article “The Truth About Trading Psychology,” you understand psychology is a science that needs to be applied to a specific area. As day traders, our trading psychology needs to apply to our day trading system. This is the foundation of how to Improve as a Day Trader. To accomplish this, we need a solid day trading system. In this article, I’m going to break down the minimum requirement of a trading system that I used to become a funded trader and consistently improve week over week—improvement being the ultimate goal.

If your goal is to improve your day trading craft so you can reach consistent profitability and lower the stress and frustration you experience as a trader, this article is for you.

When I first started trading, I needed clarity on what to do. I had no experience with the financial markets and lacked an understanding of how to be successful as a day trader. Through loss and heartache, and also the wisdom of guests I interviewed on the Trading Ascension podcast, I was able to craft a system that promoted my growth as a person and as a day trader.

This may be hard to understand because novice traders believe if they could just get the system of a great trader the will instantly also be great at trading. This is not usual the case. Yes, you do need a strategy you BELIEVE works, but that’s just the beginning. Next you must make it work for you. Just because someone else is getting results with a method of trading, this doesn’t mean success will instantly transfer to you. This is due to factors related to experience, knowing market content and of course trading psychology.

The system of generating improvement became the foundation of my trading success and is the main information I teach in my Meetup group, masterminds and in the Trading Ascension course. Let’s highlight the system so you can implement it today in your trading and know without a doubt how to improve as a day trader.

The Biggest Enemy to a Day Trader

The biggest enemy to day trading success is ambiguity. As discussed in “The Truth About Day Trading Psychology,” psychology needs to be applied to something specific. If a trader has ambiguity in their trading-related actions, they are at a disadvantage against more professional day traders and are exposed to mistaking system issues for psychology issues. When this happens, a trader might overlook the true issues in their day trading business, dooming them to repeat the same mistakes and never improve their day trading craft or psychology.

You might think, well if I get a strategy from a trading guru this won’t apply to me, put you are wrong. You don’t know, what you don’t know as a trader and although your trading mentor may have all the answers it is only through personal experience you can consider and craft the right questions.

Your strategy may include the detail of moving your stop loss after the first target is reached. One day price action hits your target but you don’t get filled and the price move against you. Do you still move to break even, do you keep maximum risk, do you close out. The more time you spend engaging your financial market the more nuances you become familiar with.

Like I said your mentor may have the answer but you have to have the experience to consider what out of millions of outcomes may occur, both normal and those on the malfunction side. It takes years to experience different market situations so you will always be learning, however mistakes that continue to plague us when facing situations we faced before are the areas of ambiguity the hurt a traders account.

A trader with the goal of improvement toward consistent profitability can use my system to reach those goals. I call it a trader success system. Let’s dive in.

How to improve as a day trader system image

The Cycle Plan

A trader should go into their trading cycle with a clear plan that has 3 crucial components. A cycle is the time frame between reviewing data. Being day traders, it is likely your cycle is a Monday through Friday week, but I use the term trading cycle to be inclusive of different trading time frames of day traders. Part-time traders may have less market exposure due to time limitations and thus need a longer cycle to reach data minimum requirements. The cycle plan includes a trading plan, goal, and self-image clarity.

Coming out of the trading cycle (week), the trader utilizes the data they have gathered to analyze performance and apply an improvement method. Today we will focus on the input factors. When you are ready to learn improvement methods check out the article here

Cycle Plan Components

Trading Plan

This includes a 3 part trading strategy merged with two other factors, Risk management and Market context
Clarity on these details are required for a day trader to take into their trading cycle.

A. Trading Strategy

  1. A complete trading strategy will help to eliminate ambiguity around engaging the market. This must be written down or typed out and includes:
    • Entry Strategy: A clearly defined method for entering the market. – What must occur exactly for you to initiate a trade?
    • In-Trade Management: Defined rules for managing trades, targets, and training price action, may at more experience stages include scaling in and out of the trade.
    • Exit Strategy: Defined rules for exiting the market. When, exit because of, and how.

B. Risk Management

Risk Management includes rules and strategies to keep your account active and avoid losing all funds. This may include managing risk per trade or even per day to build confidence and limit losses, increasing the chance of profitability over time.

C. Market Context aka experience

Gaining experience as a trader isn’t just about hitting buttons. Its about systematically and overtime building a relationship with the financial market(s) you engage with, then using that data to enhance your trading strategies. Experience in market context is essential and must be deliberately gained through data collection and analysis. Needing this experience to become a successful trader is the number one reason a novice trader just cant copy a trading strategy of a profitable trader and instantly become profitable. Don’t let this discourage you be willing to put the work in, its worth it!

Trading Goals

Trading goals are the method I use to increase my skill set while detaching from a a monetary focus, and implementing a process based focus. This topic deserves its on article but in brief lets beak down the concept.

A trades psychology is added by not focusing on what they can’t not control which is market outcomes but instead focusing on executing to perfection their written strategy and over all trading plan. Trading goals are based off monetary goals broken down into daily action. This goal becomes a carrot on a stick as it will be unlikely to trade perfectly however the pursuit of this perfect goal helps illuminate issues in both strategy edge, and personal psychology.

This approach works exceptionally well for scalping and swing trading. To create a trading goals start with the monthly PNL amount desired. For example if you want to make $2,000 a month trading part time that is the overarching goal.

next take this amount and break it down into the number of cycles in a month, if you seek to trade daily this is on average 20-22 trading days. $2000 dived by 20 trading days means to reach that goal a trader will need to make $100 every market session. (remember perfection of outcome isn’t usually possible but you’ll see how this goal serves the purpose of improvement. )

Next determine how many trades based on your average win amount are needed to reach this goal. Foe example based on your account size and contract amount you can scalp a point for so for $50 bucks. So you would need to successful trades daily.

Now we only focus on the 2 trades, the next milestone is to successfully complete two trades daily. The cycle goal in this example if a trader has a weekly cycle is 2 trades times 5 days totally 10.

Self Image Clarity

Clarity on one’s future self is paramount for achieving long-term success and fulfillment. Dr. Ben Hardy, along with numerous studies, underscores the significance of envisioning and defining our future selves, by who we are, how we show up, how we react as the person already having our desired results. Clearly identifying our aspirations, goals, and desired outcomes, creates a roadmap for personal growth and development.

This clarity empowers us to make decisions aligned with our future vision, cultivate resilience in the face of challenges, and sustain motivation over time. Without a clear understanding of our future selves, we risk drifting aimlessly and falling short of our potential. Therefore, investing time and effort into clarifying our future self is essential for creating a purposeful and fulfilling life. The goal here is to feel an emotionally connection with the term I am a successful trader and take the actions of a successful version of you despite any external influences.

The Real Foundation of Trading Success

The truth is, the foundation of trading success lies in having a solid trading system first. Your trading psychology should enhance this system, not replace it. A robust trading system provides the structure needed to apply psychological principles effectively. This will drastically push your forward on the path of how to improve as a day trader.

Conclusion

In conclusion, while understanding and managing your trading psychology in theory is important, it must be applied to a well-defined trading system. Without this foundation, psychological strategies alone will not lead to success. Focus on building a solid trading system first, then use trading psychology to optimize your performance within that system. To get help setting up your trader success system, use the form below to reach out for one-on-one coaching.

Key Takeaways:

  1. Ambiguity Is the Enemy: Ambiguity in trading actions leads to irrational and inconsistent decisions.
  2. Need for a Trading System: A solid trading system is crucial for applying trading psychology effectively.
  3. Trading Plan Components: A complete Trading plan includes a trading strategy, risk management, and market context.
  4. Cultivate a clear vision of who you are as a person once your goal is achieved. 
  5. Experience Matters: Deliberate data collection and analysis enhance market context and improve trading outcomes.

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