Trading is an individual activity but that doesn't mean you need to be confined to solitude. At the end of the day, you are responsible for your own trades, however you can surround yourself with other people who will help improve your trading. As we know, psychology plays a huge role in day trading. Who you surround yourself with can impact your mind state (for better or for worse). These are a few of the different kinds of groups that can help you improve your day trading.
Your trading buddies are the people you trade with on a regular basis. You guys can discuss trading activity and share your results for the day. This group is important for a few reasons:
- Accountability - When you share your results with other people, you become accountable for everything you do. You can't simply bury that bad trade you made because you broke all of your trading rules. Accountability can help your trading because it may help you think twice before making a foolish move in the markets. Don't confuse this "buddy system" with sharing your P&L on Twitter. Sharing profits on Twitter can become more about validation than accountability. This can actually have a negative effect because you become worried about what everyone else will think and don't put enough focus on your trading.
- Conversation - Let's face it; the majority of people know nothing about day trading. Even if someone has an interest in the stock market, they probably only want to ask you which stock they should be buying. It's nice to have a few people who you can discuss your hobby/passion/career with, and there's a good chance your regular group of friends doesn't care about VWAP, parabolic shorts, and chart patterns. Your trading buddies can also help pick you up after a big loss. This group is great for moral support which can play a big role in trading psychology.
- Learning & Growth - You can learn a lot from other traders within your circle and they can also push you to enhance your own trading strategy. For example, Gregg (@lx21) inspired me to start scaling up my strategy by asking why I always wire out. It's interesting to watch other traders throughout their career and see how they grow their strategy.
When you start out trading, and even once you've been trading for awhile, it's helpful to look at traders who are better than you are. This comparison can help you pinpoint things you should (or shouldn't) be doing to get to the next level.
Now, there is a right and wrong way to do this. I've said before that you shouldn't compare your "Chapter 1" to someone else's "Chapter 10." The goal is not to hold yourself to the same standards as more successful traders because that will cause you to undermine your own accomplishments. Instead, the goal is to analyze the gap between "Chapter 1" and "Chapter 10." What did that trader do to take things to the next level? How has their strategy enabled them to get where they are now?
The term "role model" often has a different connotation. I'm not saying to look up to other traders nor am I saying to copy what they do; I'm saying to use them as a model for your own success. This can also help provide some clarity to your goals because you have a better concept of what you are trying to achieve.
People say 90% of traders fail. Okay, great that leaves 10%. Why focus on the ones that are in the 10%? If you truly want to be successful, the focus should be on what the 1% are doing and how you can improve yourself within the 10%.
Molding these Strategies to YOU
There is something to learn from all great traders. Your style may be different from many great traders, but you can still learn some of the tricks they use to excel in the markets. Take Sandro for example - My style of day trading was not for him, however using my style of entries on a smaller scale and big picture swing trading was HIM. So he merged the precision entries from things he learned from some, and the patience he learned from others and molded to his own "YOU." Your trading style may be an amalgamation of strategies from multiple day traders.
The last important group of people is the people you use for trading ideas during market hours. Maybe this is the same group as your trading buddies, maybe you are in a chat room, or maybe you follow a bunch of people on Twitter. The point of this group is to help you trade better during the day. This group may provide information, alerts, trade ideas, etc. For example, you may know one guy who is good at finding news very fast, one guy who is great at finding technical breakouts, etc.
The two easiest ways to create this group are chat rooms and Twitter users. Chat rooms are nice because you get a bunch of traders with different skill sets sharing ideas in real-time. Twitter is very similar as well. If you follow the right people, you may be able to get earlier access to news and other trade ideas.