Since I started coaching traders back in 2012 the majority of my time & energy has been spent preparing them for success & walking along that path with them. However, for about a month each year, I dial things back & take time to focus on my own personal development as a trader. During this time I typically focus on one of a few things; reading books, taking/reviewing old courses, or working on a new strategy.
This year I’ve focused my attention on revisiting volume spread analysis in the Forex market which was something I’ve previously ignored in the past due to the fact that the Forex market is a decentralized market & therefore any volume reading isn’t a “true” number. As of writing this I still haven’t come to any conclusions on whether it’s something I’m going to implement or not but what I can tell you is that the journey of looking for an answer to that question has already proven to be beneficial.
What I’ve done for the better part of our holiday break is walk through historical data, one bar at a time for many years on many pairs with the goal of merely making observations. This is a 180 degree turn around from how I treated the testing process when I first started trading. Back then, I was only interested in finding the answer to a predetermined question. I was looking at the testing process as being binary, looking to only see if my idea worked or didn’t work.
The truth is, a trader needs to approach testing less like a math question & more like a hypothesis, meaning that yes there is an initial or proposed thought, but that thought is created from limited evidence & it serves as only a starting point for further investigation.
So I’ve been enjoying the process of “free testing” or what I’ve referred to in the past as the “eyeball test” as it’s allowed me to make many key observations about price action that will benefit my trading whether I come up with something new or just implement them into what I’m already doing. As someone who devouts himself to the Kaizen philosophy of continuous improvement, this has certainly been a small deliberate step in the right direction.
For more on this subject, including some of the struggles that I’ve faced during this process, please give this podcast episode a listen.
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