Finally, we are getting to the stuff you probably care the most about. However, there are several layers to be addressed here, so I’ll offer seven reflective questions to consider. Remember, you are unique from other traders, so it will be dependent on you to take these and modify and incorporate them into your own needs.
7 Questions For Your Trading Self Assessment
Did You Enjoy Trading?
I was consulting with a trader recently who had hit a dilemma in recent weeks. After a series of questions, I finally asked him, “Do you still enjoy trading?” He seemed surprised by the question, but eventually, he acknowledged he no longer enjoys it. Once he realized this, he understood much more about the situation he was working through.
So, as you take inventory, are you still enjoying trading? If yes, do you enjoy it too much or too little? Long-term traders who make a full-time career out of this tend to be so convinced about what they do that they enjoy it. However, from my observations, they tend to enjoy it in appropriate amounts. They don’t over-enjoy it, nor do they despise it.
One of the barometers of your readiness for full-time versus hobby trading, or a signal of your growth in this process, is whether you enjoy it moderately, without getting too excited, but still love what you do.
Some traders, even good ones, find that they enjoy their craft less and less after certain seasons. If this is so, you might consider the trifecta of mental, emotional, and physical health, which could be a culprit.
What’s Your P/L Saying to You?
Perhaps the most obvious and tangible assessment of your first quarter is your profit and loss statement. Did you meet your goals, or did you miss them? Once you assess that, the next step naturally becomes asking, “Why did I miss my goals?” or “How do I sustain my success?” For more on that, see the next point.
Are You in It for the Long Haul?
More simply put, is what you are doing sustainable? This reflection is a double-edged sword applicable to both successes and failures. In other words, if you were successful, can you sustain that? The markets won’t be volatile forever; accordingly, was your success a fluke or by design? On the other hand, if you failed to meet your goals, then the tricky question becomes, how will you be able to maintain your account over the long haul to continue to trade and learn?
Do Your Trading Rules Need a Refresh?
Every trader needs rules. While I advocate writing them down and thinking of them regularly, maybe you prefer to maintain your list mentally. In either case, what is crucial is how you keep your rules. So, as you assess the last quarter, did you stick to your rules? How, or how well did you follow them? Then, how might you modify your rules for further success? And, if you didn’t keep your rules, what do you need to incorporate into your discipline to be more successful at sustaining your plan?
Can You Identify Your Growing Edges?
Whether you were successful or disappointed by your results, it’s important to identify where you may improve. Otherwise, it will be impossible to turn failure into success. On the other hand, if you were successful, then the key to longevity is a continuation of personal and professional growth.
This is a loaded topic that should prompt you to inventory everything about your trading, particularly your losses, so that you can detect patterns. For instance, maybe you perform worse during a specific time of day or in particular markets, and so on. The critical truth is you will not enjoy long-term success without a careful self-analysis under the microscope.
Can You Enhance and Count on Your Strengths?
As challenging as it is to analyze our weaknesses, it may be even more challenging to provide a critical assessment of our strengths. However, the things you did well in the last quarter should be considered and expounded upon to further secure your potential. In other words, work on not only your failures but also on your achievements. For some, these successes will not last without continued work. What happened last quarter may not occur next quarter, so your strengths are only as good as your most recent P/L statement. Innovation and self-improvement in all facets is vital.
Are You Ready for More?
Okay, are you ready to reset and rebalance? Do you have goals prepared for the new quarter? If yes, then are they reasonable? If you haven’t set any objectives, then why not? How will next quarter be better than the last quarter? Have you planned for it to be, or do you just assume it may be?
Come on! Let’s all challenge ourselves to be the best we can be each and every day.
To sum it up, these are useful considerations for taking a self-inventory. Of course, some of these elements you may find more or less helpful, but I’m convinced there will be something worthwhile here for us all. So please feel free to engage this topic through the forum discussion. And as always, until next time, trade well!