Secrets For Learning How To Trade

Secrets To Learning To Trade
http://www.netpicks.com/learning-to-trade/

How many hours do you spend on
your quest with learning to trade?
I am talking about the studying of the
indicators you may use, price action,
price structure, or anything else like
viewing chart after chart like I do.

You sit down at your desk and before you
know it, hours have clicked away and you
wonder just what did you learn.
When it comes to learning anything new
(or even to refresh what you already
know), quality over quantity is key.

There are two distinct ways we learn
and both of them are needed to really
begin to not only understand but also
master what you are studying.

Focused Learning
This type of learning is what you are doing
as you sit and work through the charts or
read up on market mechanics.
This is intense focus
which is not to be confused with
checking emails while you learn how
to trade.

Multi-tasking is not the preferred
method of studying anything seriously.

During this intense type of learning
and digging into the material, you are
using what is called "working
memory". Think of working memory
like a pad of paper that only has a few
sheets left. There is a limited amount
of information it can hold.

The problem is that much like your pad
can run out of paper, you can only
store so much information in the
working memory.

After a while, all your intense focused
learning simply becomes wasted effort
as what you began with at the
beginning of your learning session,
becomes scattered.
This is when the other stage of
learning comes into play.

Diffused is the opposite of focused and
this is where you allow your brain to
piece together everything you are
learning. Think of it as closing down
your computer and simply going for a
walk or grabbing a coffee.

In the background, your brain is
sorting through all the information you
have been studying to learn to trade.

I'm sure many of you have
experienced going to bed thinking
what the solution to a problem may be
and you wake up with the answer.

This is the diffused process of your
brain going to work and this process
has a huge impact on your ability to
learn whatever it is you have set your
mind to.

So what does this have to do with trading?
A lot.

Sitting for hours in front of your screen
or diving into trading books or trading
tip blogs can be compared to
cramming for the final test in school.
Cramming is not the way to go into the
testing center ready and able to pass
the test.

It is also not the way to learn what you
need to know to enter the trading world
Why?

When learning to trade or anything
else, you want to learn in bits and
pieces repeated over time and not in
one intense session. Yes, you may
understand the material but at this
point, it is not an understanding that
allows a practical application.

Note: Too often in trading, people
suffer from "illusion of competence".
They think because they understand a
concept, they can apply it. This is one
of the reasons many traders jump in
with real money long before they are
ready. The result usually does not end
positive.

These bits and pieces all assembled is
what makes up the knowledge of
trading that we retain and are able to
implement.

BUT TO FOCUS ON "LEARNING
HOW TO TRADE" IS NOT THE
BEST ROUTE EITHER.

That is the end result of what you are
doing but in between the beginning
and the end, there are many steps.
That is where your
attention should be.

Let's take an idea where as part of
your trading, you want to learn all
about certain trading patterns like the
head and shoulders.

That pattern is just one piece of the
puzzle and instead of focusing on the
big picture, you dial down into
understanding that particular pattern
and each of the components.

You learn the why behind it.
You learn what a failed pattern looks
like.
You learn about stop placements.

You learn bits and pieces of the trading
pattern (chunks) and over time they
come together in a cohesive structure
in your mind where you will be able to
point one out on a chart without much
effort.

And you repeat the practice of finding
them on charts over and over again in
the days ahead. When you find them,
you set the chart in replay mode and
you walk through trading them.

Think of the replay of the chart as
testing yourself. Find the pattern, set
up the trade, and walk through bar by
bar. Constant testing of what you are
trying to learn is another key to
actually learning and mastering the
topic.

Finally, you become a master of
trading that particular pattern.
You learn all of that under the
umbrella of learning how to trade. It
can be a daunting task if you look at all
you need to learn in order to have a
chance of being an effective trader.
Take it one piece at a time.

But no cramming.
There is where the Pomodoro
technique comes into play.

We can thank Francesco Cirillo for this
simple idea. Break your learning into
25 minute segments and then take a
break.

Focused learning (what you will doing
with the Pomodoro) is intense and is
huge brain drain. By committing to
devoting 25 minutes of intense focus
to a topic, you are only part way to
getting the information into the longer
term memory where it can actually be
useful.

25 minutes and then take a break.
Or simply end your session and go
about your day know that in the
background, the diffused mode of
learning has taken over.

Understand that learning is a process
that can't be forced. You must
approach your trading education in a
systematic way and ensure that when
the time is supposed to be for
learning, that is what you do. But
don't do it for too long.

Use the Pomodoro timer to limit your
focus mode of learning to 25 minutes
of uninterrupted focus. Leave your
work space for a time to allow the
diffused mode to begin to process and
piece together what you have been
focusing on.

Test yourself constantly
throughout your learning.
Learning a new pattern you may want
to trade? Draw it out marking out all
the essential components including
where the pattern shows up on a
chart.

Learning about biases that
can affect how you trade?
Test yourself by writing out what you
are learning after you have spent time
studying it.

Walk-through chart step by step and
watch what the behavior of price is
around key zones. For example:

Draw out support/resistance lines on key
swings.
As price moves towards these zones, draw
out what could happen.
Advance price bar by bar while adjusting
your hand drawn chart and account for
different scenarios.

Do not neglect your health.
Studies have shown that during the
day, metabolic toxins build up in your
brain that are only flushed out during
sleep when your brain cells actually
shrink.

Running on empty for too long can
cause less than optimal learning
conditions. Regular exercise can also
increase your ability to learn.

Another thing you can do as you learn
is to either set yourself up with a
reputable trading company or find
trading groups in your area. Schools
have study groups for a reason.

Often times we get so "hooked" on
one process that we ignore others.
Group work can help you break out of
one way of thinking and open the door
to new possibilities.

Schedule your study time as a routine
and seriously consider some of what
has been talked about. Don't think
that understanding equals mastery
and give yourself plenty of time to
really understand and be able to
implement all that you are learning.

Learning to trade takes time.
Give yourself time.
The markets will be here ready to give
you profits when you are ready.

Secrets For Learning How To Trade

Secrets For Learning How To Trade

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