One of the themes of my upcoming book, Trading Psychology 2.0, is that inventiveness is the novel trading discipline. Success inward markets is non as well as then much a business office every bit rigidly adhering to a single, unchanging border every bit continually finding fresh sources of border inward ever-changing markets. But how produce you lot come upwardly up alongside fresh trading ideas as well as sources of edge?
Reader, author, as well as blogger Ivaylo Ivanov (@ivanhoff) offers a best work that tin feed our creativity. Here’s what he suggests:
Studying your ain by trades is a must, but it provides a express perspective of chance cost–it solely helps to analyze the trades you lot took; it tells you lot nil near the trades you lot did non take. One of the most practical habits that has helped me every bit a trader is going through the daily charts of the best performing stocks on a daily, monthly, quarterly, as well as 6-month fourth dimension frame.
Here are simply about of the benefits of this daily exercise:
* It has substantially improved my setup recognition skills;
* It has given me ideas for novel ways to approach the market;
* It provides an unbiased sentiment of what is currently working inward the market; which industries are nether accumulation. Recognizing manufacture momentum is of utmost importance for swing traders every bit it helps to focus on setups that don’t solely get got higher probability to interruption out or interruption down, but are also probable to deliver bigger gains;
* The mere going through the screens provides me alongside a constant menses of slap-up anticipation swing setups–stocks that are setting upwardly for a potential breakout.
Readers volition recognize this every bit a structured work inward designing recognition. In his book, Ivaylo outlines his “perfect setup” for swing trades. His best work above, additionally enables him to acquire novel setups. It also allows him to position sectors that are most probable to yield expert setup candidates. Indeed, the patterns that emerge from such review could lend themselves to backtesting as well as possible systematic inputs into discretionary trading.
I also suspect that Ivaylo’s best work helps him position marketplace themes early–for instance, the breakdown inward unloose energy stocks inward the wake of petroleum weakness or the ascent inward utility shares resulting from declining global rates. It’s non such a boundary to acquire from his work to a review of patterns across global markets to position the macro themes that mightiness endure attracting the involvement of institutional investors.
Interested readers tin banking concern check out Ivaylo’s website, every bit good every bit his mass as well as Twitter feed linked above. He’s a slap-up illustration of savvy traders sharing worthwhile ideas via StockTwits.
Further Reading: Parallel Processing as well as Pattern Recognition