Do you keep a list of your big winners to easily study and refresh the setups in your mind? Sometimes it easy to overlook because we're to busy trading our holdings and scanning for new trades. But by taking just 20 minutes a week to study past setups we help embed the right characteristics in our brain.
As you do this again and again, the brain begins to recognize proper setups when we scan charts to add to the watch list. It becomes natural to be able to scan 7-8 charts in a few seconds rather then a few minutes. You'll begin to notice that when you do come across a specific setup that there's an immediate "ah ha", or a jolt to the gut, or a bell going off in your head that this stocks needs further investigation. All of this takes time and practice to master which is why 20 minutes a week reviewing your past winners as well as losers puts you one step closer to being a better trader.
Past study helps you recall what works and what you're searching for in your next trade. You'll start noticing small nuances in past winners that are relevant to a stock's success today. It's quite possible that as you observe specific characteristics in past winning trades that new ideas emerge which leads to new in depth study which then leads to greater trading efficiency.
This 20 minute exercise also keeps us focused on what makes us money and that's finding proper setups. There is a large part of the trading community that obsess over the general market by spending hours analyzing perceived support and resistance levels. The general market indexes are just the playground in which we spend our days. The individual stocks are the rides we get to choose. And, if we choose the right ride with the right risk controls in place, it can be one heck of a ride. When we select properly, our individual stocks help us beat the market returns by several fold.
Image being extremely conservative and only risking .20%-.25% of your trading account per trade with no leverage. Over the course of the year by picking and trading a handful of big winners you will have locked down a nice return on your capital. So the next time you have 20 minutes to spare, sit down and focus on the price action of your past winners.