As incredibly important as it is, all you need to do in this step is to identify those trading styles and strategies that appeal to you more than the others and write about them. But this is how you’re going to keep yourself moving forward and not get stuck in place.

Just make notes in your journal every day. Pay attention to the trading styles (e.g., intraday trading in stocks, options trading, futures trading, etc.) that seem to stick around and keep your interest and write about why you think that may be happening with these particular styles. Do this every day because it keeps you conscious of where your instincts may be leading you. 

You see, if you’re not able to transition out of the Exploration Phase, where so many aspiring traders get stuck on the hamster wheel, and into the Gravitation Phase it might be the end of your journey. So just the simple act of taking note of and ruminating on the styles of trading you seem to keep going back to or can never seem to get away from can serve as an initial catalyst to getting yourself on the path toward the Gravitation Phase instead of the path to nowhere. It’s especially important to take note of those styles of trading with which you really connect and which fit your lifestyle.

For instance, if you’ve developed an interest in swing and momentum trading in stocks, then you need to write about this in your journal every day. Certainly if you’ve back tested, simulated or traded strategies within these styles in the live markets and had some degree of success you should take note of this. Write down what you like about these styles of trading and even what you may not like, or what kinds of challenges you’ve encountered with them. Give yourself plans of action every day to learn more about them and to gain more experience in them, like using the charts to identify stocks that may be ready to rise or fall based on moving averages or consolidating price patterns. Set weekly or monthly goals for learning, like next month you want to learn and apply swing trading techniques using MACD or Stochastics.

Get your hands on as much material about these trading styles as you can. Find videos, articles and blogs on the Internet and sign up for as many courses as you can find and afford, all the while journaling every day about what you’ve learned, your opinions and thoughts and how you feel about them. If you determine at some point that you actually DON’T like them as much or they end up not fitting your personality after all, put them aside and focus on something else that piques your interest.

As you do this, make sure you’re also thinking about whether or not each trading style you like may fit your lifestyle. If it’s a style that demands you be at your trading desk throughout the market day but you work all day for an employer who does not let you trade, it’s not going to be a practical style to learn unless something changes. But don’t quit your day job! Make sure to read my blog post “Considerations When Thinking About Trading as a Career” on the RALLY BLOG page.

Focus on trading styles that fit your lifestyle because you want to use your time wisely and get closer to your ultimate goal of profitability. You want to avoid wasting your time and efforts during the Exploration Phase because there will be enough work to do on the right things. If you work all day but have certain windows of time to trade, probably a longer-term or intermediate-term trading style would work better like position trading in stocks and ETFs or spread trading in options. So spend your time on these styles if they appeal to you. You can always spend time on the other things but just make sure you spend much less time on these other things and much more time on strategies for which you actually have the availability to oversee and manage.

If you’re willing to follow your instincts then you’re willing to trust them. This is very important for developing a clear idea of WHO you are in the markets and acting on it. And this is ultimately how you make money in the markets.

So just keep it simple in this step; it will be counterproductive to overcomplicate things or to rush yourself. Just study, write in your journal and let your instincts guide you.

Did I journal every day and follow my instincts?

I didn’t journal every day in the beginning but I did start to see the value in it relatively quickly and ended up filling several notebooks through the years. It was quite valuable and I still go back to look at my notes from time to time. I wouldn’t have fully absorbed all of the information without the journaling, and I wouldn’t have ultimately learned what kind of a trader I was without it. It allowed me to express my opinions and frustrations and revisit concepts until I fully understood them. It allowed me to ask questions to myself that I would answer later. Journaling, in my opinion, is one of the most important things you can do as a trader.

Following my instincts was another matter. I knew fairly early on that Technical Analysis and market-neutral trading in options appealed to me, especially the latter. I became very focused on options trading very soon in my journey but just kept coming back to using Technical Analysis to trade stocks because it was a close second. But like I said in the previous step, I wasted time bouncing around between the two styles because I wanted just one style of trading to work all the time. And I was also very distracted by so many other styles of trading, like intraday trading and pairs trading and futures trading and currencies, that I didn’t take adequate notice of where my personality was actually leading me. By the time I finally figured it out and committed to the right things I’d spent years bouncing around like a pinball.

I was lucky because when I finally realized that I needed to focus most of my time and efforts on both swing trading and options I had already found a trading style in automated trading that was compelling and profitable. Being profitable kept me in the game long enough to finally see what should have been obvious. I couldn’t believe I hadn’t trusted my instincts because it had all been right in front of my face. If it had been a snake it would have bitten me, as they say. 

Don’t make the mistake I made and get pulled in all different directions, wasting your time and efforts on trying to find just one style or just one strategy that will work all the time – it doesn’t exist anyway – or trading styles you’ll never actually apply in the real world. Trust where your instincts are leading you and make sure you’re moving forward, not running in place.