📖 STEP 4 to MASTER TRADING: Focus on One Pattern 📖

2 בספט׳ 2022

"I fear not the man who has practiced 10,000 kicks once, but I fear the man who has practiced one kick 10,000 times." - Bruce Lee

We, traders, have a natural passion for learning and that’s really great and helps us build that foundation for trading. However, a moment comes when enough is enough and it’s time to focus on something more specific. But very often, we can make the unconscious mistake of trying to learn as much as possible, without even questioning if we really need it at the moment.

🟩 TOO MUCH INFORMATION
For anyone eager to learn, the information is there. In fact, too much information, and naturally, it can be hard to stop learning. Sometimes we just feel we need to learn about one more pattern, one more strategy, one more approach. And it may seem that more knowledge will bring quality. And that’s true when you just start trading, however, later in your career, it makes sense to think and ask yourself: “Do I really need one more strategy which I know on an average level, or should I maybe focus on one strategy, or one pattern of any given strategy - and really master it, and refine it to the very deep level of understanding?”

🟩 IT’S UNCOMFORTABLE TO LET GO
This part can be discussed for a long time, but based on what was said before, it’s literally uncomfortable for traders to let go of this habit of trying to trade multiple patterns, and learn more patterns in between. I’m not sure why this is so, there must be some psychological reasoning for this, but in simple words, every new trading pattern can be treated by us as a new opportunity to make profits in the market. And so when we stop learning more patterns - it can feel like we’re missing something.
And it may seem that the more we trade, the more patterns we can use - the more profit we can bank because we can enter into the market based on different patterns. And while that may be true to some genius traders, for most of us it doesn’t work that well. More importantly - we don’t need to do it. It’s enough to master 1-2 patterns of a given system we believe in and tested, and so have confidence in it.

I propose you consider “cutting off” 90% of your trading knowledge and focus only on executing 1-2 patterns max. Think about it. If you’re like me, you should feel really uncomfortable or even scared to do this. It may even seem stupid. Because it means you should let go of all the time you dedicated to learning, and maybe even trading with some systems before. But it’s an illusion because that time and effort - they are not lost, you can’t lose them, they are part of you now, part of your experience, something that led you to finally choose something you will work with really closely. But if you will attach to everything you learned before – this will confuse you and spray your focus all over the place, making it much harder to become a specialized, professional trader.

🟩 FOCUS ON YOUR BEST PATTERN ONLY
When the time comes, and you’ve tried several strategies, it now makes sense to stop exploring additional systems and just focus on one system and learn everything about it. For example, if you’re trading head and shoulders, then stop trading double tops and bottoms, break and retest, and diamond patterns. Why? Because head and shoulders are not just 5 lines on the chart, it has numerous variations in how it plays out in the market, in different markets, sessions, and contexts. And you have to know it, see it, test it, and refine it. Become a master of head and shoulders, or any other specific pattern and trading approach, and be profitable with it. And if profitability is there - you can move on to another pattern, but at that stage, you will not need it probably.

🟩 HINDSIGHT TEST, BACKTEST, FORWARDTEST, REFINE
It’s a great practice to have a “hindsight journal” and your backtesting journal, that will only be about that pattern you chose to trade. And there could be several reasons for choosing some particular pattern. But usually, it comes from your mentor or anyone else that you saw who reached sustainable profitability with it, and you believed in this pattern. But that would not be enough. You can’t tell your brain - believe in this. You need to actually show and prove it to your brain and to yourself.
So you need to backtest this pattern, and only this pattern for at least 150 trades. This will help you to develop real confidence in the system.

🟩 YES, IT CAN BE HARD TO FIND “YOUR” SYSTEM
I spent almost 3 years before I really found something I was willing to stick to long-term. Not sure if there’s actually good advice on how to find the system for yourself. It depends on your personality, your lifestyle, etc. Based on my experience, I would say just continue to learn and listen to yourself. Most likely you’ll find some trader or a mentor and you’ll like his trading style. Try to replicate it, and stick to his system. With time, and during journaling and live testing, it will all develop into your own system. Yes, it may look similar to your mentor’s but it will be your system.
And once again, a trading system can have different kinds of entry confirmations, but it makes big sense to choose 1 or 2 confirmations and master them.

🎁 For those who are still reading :), thank you, and here’s BONUS trading hack for you. Next time during your trading day, when you'll feel something is wrong, maybe you're frustrated or just feel like your discipline starts to slip away, or maybe even you catch yourself thinking about entering without entry pattern or risk more than usual - realize that's your "monkey brain" stepping in. It's very hard to control, but easy to trick. Here's what you should do. Say to yourself: "Ok, I'll do whatever I like, place any kind of trade with the risk of half of the account if I want, BUT after 20 min. pass." Then you just start a timer (you can google "timer 20 min.") and do whatever you like after that 20 minutes. Usually what happens is you calm down and don't do stupid things. It very simple but effective technique.

🚀Thanks for your BOOSTS and support🚀
💬Send your comments and questions below, I'll be glad to talk to you💬

Dima