Forex Strategies and Tips
You Are Your Own Best Teacher
The Teacher Learns More Than The Student
Have you heard that expression before? Have you had that experience? We sure know it to be true. That's why we love teaching so much. Whenever we have to stop and explain something, it always makes us dig a little deeper into our own understanding and solidify it for ourselves more.
So what does this have to do with being a great trader and making more money? LOTS
We have a great advantage in our trading operating as business partners because we continually discuss our strategies and approaches to trading with each other. And it's not just the pre-trade rhetoric of "whaddya think of this trade? Should we take it?"
We work the post-trade, next day, and end of week analysis with each other too. We think it is this that has really advanced our skills.
Why did this trade work?
Why did this one fail?
What did we miss seeing?
How could we do this better?
What we're doing in that analysis is actually stepping into the role of teacher to each other. We're forced to put on our thinking caps and dig deeper - and we both learn through that.
Let's look into this theory and look at a few solutions every trader can take to bring this benefit to their bottom line profit.
Good trading to you all, Mindy / Smart Tools Developer, Trader
Active or Passive Learning
One of my great mentors often said:
Knowledge in the book stays in the book.
He wanted to emphasize that until you made what you read in the book your own, it remained nothing more than words on a page.
In the very same way, perhaps you've taken courses and webinars from so many Forex 'gurus', or you've read books and been in chat rooms, scanned the blogs for hot tips and tricks - but whatever you've exposed yourself to has probably all been in the form of passive learning. Sitting back and drinking it in.
This is good, and it's certainly a critical step, but is it enough? No.
And what about trying the ideas out in your own trading – that seems like it's active... Is that enough for mastery? Not really.
Granted, you're a little less passive and a little more active as you actually trade. But we strongly believe that the full power of the mind has to be engaged before you can master a trading technique.
You have to own a teaching like it was yours – like you invented it – before you can see all the subtleties and nuances to when it works and when it fails.
What's the test of this mastery?
Try to explain exactly what you're doing to someone else. Even to an imaginary friend. To actively learn you have to sit down and explain every detail of what you do, when and why.
How To Become Your Own Teacher
If you have a trading partner, you can take your analysis up a notch and make sure you alternate who is talking and who is listening, so you both have turns at being the teacher. But what if you trade alone, as the majority of Forex traders do?
Let your Trade Log be your trading partner!
The Forex Smart Tools Trade Log includes a parameter called "Lessons Learned" in which you can write down your notes and observations about each trade. But if you're like us, we tend to be pretty brief when it comes to typing very much. We'll make a few key notes, but seldom do we take the time for long paragraphs or lengthy explanations.
Get us talking though - and everything about the trade comes out. So this is what we suggest you do too - start talking about your trades.
Talking out loud is a great way to EXTRACT the insights we have from our own minds.
It's a powerful technique to turn a fuzzy or generalized idea into a sharp, crystal clear concept.
You could use a voice recording app set up on your computer and paste that into your trade log URL section. And remember, we suggest this not just as a way to store your notes, but as a way to get you explaining your trades to yourself - to start actively teaching yourself.
Better yet - start making movies with your charts and your analysis. Then use the URL parameter in the Trade Log to link your own movies.
These movies can then be part of your record for each trade, and can be played from within the Trade Log itself - so your understanding about each trade is linked to the screenshots and other notes about the trade. The movie can include not only your verbal discussion, but also views of the chart you used.
You can set up as many of these URL custom parameters as you like. Here are some suggestions:
① Make a movie as you are ready to enter a trade, discussing what makes you want to pull the trigger at that point.
② If you manage your trade as it progresses, record another movie in which you discuss... (yes, with yourself)... your decisions to stay in or pull out, add on or scale out.
③ After the trade is done, record your post-trade analysis too.
There are a number of free or inexpensive web services that let you record and even store your movies. Here are a couple options:
And for storage, you can use any Cloud service like Google Drive, Amazon S3 or Dropbox. We like keeping movies we make on a cloud server rather than our own hard drives as they can take up a lot of room – and cloud storage is easy and inexpensive. All the Trade Log needs is the link to that movie, and you'll be able to easily store it with your trade forever more.
Here we demonstrate this idea in practice: