Friend or Foe? Finding Your Trading Personality

Every trader has made the same fundamental error at some time in their career. Actually, most businessmen and entrepreneurs make this same mistake.

Let me tell you a story: While at graduate school, I was crazy about windsurfing. Whenever it was windy, I was sailing. Nothing else mattered. Classes, assignments, term papers, labs and everything else took a back seat. If it weren't for my marks, I would have been kicked out for sure.

Ask yourself "How can anyone get decent marks with that kind of focus?” And focusing on the task at hand, trading or otherwise, is what I want to talk about.

When it wasn't windy, I was concentrating 110% on my studies. And when it was windy, I only cared about sailing. I knew exactly when and where the conditions where sailing conditions were perfect because I kept a detailed journal of my sailing experiences. In other words, my journal told me exactly what I should be focusing on: studying or sailing.

The biggest mistake people make is not keeping an accurate account of what they are passionate about. When it comes to trading, a journal can mean the difference between success and failure. Not having one is one of the biggest mistakes you can make.

It's simple: when you start keeping a journal of your trading activities, those records will eventually tell you why and how you succeed or fail.

No matter what you trade or how you trade, you are your own worst enemy. Conquer your own inner-self and anything you can imagine can be achieved. As every floor trader can tell you, know thy enemy. Thy enemy, my friend, is you!

By keeping detailed records of your trades, and periodically reviewing those records you will begin to see patterns that lead to either success or failure. By detailed, I mean time of day, weather, your moods, your thoughts or how you were feeling physically. Write down as much as possible as clearly as possible.

By reviewing my own trading journal, I learned not to trade on windy days no matter what! I learned not to trade before programming deadlines, that my most profitable trades where made mid-week and my poorest trades were nearly always made on Fridays.

I learned that the best research I did was on sunny days. That family time and trading were poor bed fellows and that day-trading on an empty stomach was always a poor decision.

Most importantly, I learned to maximize my chances of success by knowing something about my trading personality. When I realized this, I conducted a survey of my trading clients and business associates and guess what? Those that kept a journal did far better than those that did not.