Have you ever had the light shine on your trading in a most unusual way—by something totally unrelated to trading?
This morning over breakfast, my wife and I realized that today is my sister’s birthday. It threw us into a minor panic. We had totally forgotten! No gift, no card.
Rather than focusing on the things we planned to do, a good part of the morning was spent figuring out a gift, getting it, making arrangements to have it sent, etc. Nothing we should have been doing got done. All attention was focused on the gift.
At the end of all this, my wife asked me, “When is your mother’s birthday?”
“That’s months away, why?” I asked.
“Because we are going to ACE this,” she replied.
ACE? Intrigued, I began to learn about the ACE process.
ACE
You see, my wife works for one of the largest corporations on the planet, and ACE – Achieving Competitive Excellence – is their continuous improvement operating system. It works incredibly well and can be easily adapted to trading.
A fundamental idea of ACE is to have an uneventful day. Eventful days are to be avoided. Events cause disruption to the normal workflow. They divert your attention, create stress, and keep you from getting important tasks done. Events create crises. This is why my wife asked for my mother’s birth date. When an event occurs, you should figure out how not to have that event again. You make a plan. It’s the process of continuous improvement. You learn from the event so that you can avoid the same event from recurring the next time. Very smart thinking.
ACE Thinking for Traders
Traders can adopt ACE thinking and improve their trading process. One simple ACE action traders can do is to have a game plan when coming into the market. A game plan gives you a framework to help you make sense of the next day’s market action. Lay out the market’s structure the night before and watch how the market trades around that structure the next day. Even if the market does something different than anticipated, your game plan gives you a reference, which itself is useful information.
Not having a game plan is a sure way to cause ‘events’ in your trading. Wondering, for example, where weekly support is located in the middle of trading is a sure way to cause an event. If you start reviewing your weekly charts in the middle of a day trade you can wreak havoc on your trading: diverted attention, increased stress, erratic trading behavior, trading errors, lost profits, lost capital.
When Trading Events Occur
Of course, even with a game plan, you will still have events from time to time. When an event occurs, think through how not to have that event again in the future. Then, take whatever steps are needed to put your correction in place. Often, the corrective action will revise and enhance your overall trading plan. This is continuous improvement in action, and it leads to better trading.
So, ACE your trading! Avoid events by being prepared with a daily game plan and take corrective action for those events that do occur. It helps you keep your trading and your trading psychology on an even keel.
You can learn how to ACE your trading and other key psychological insights at the author’s website, including free resources you can immediately use in your trading.
