If you have read my article on Pareto charts this will probably make more sense to you.
Root cause analysis is another tool that traders could benefit from. I know that some of these things do not seem trading related, but you can improve results with them. When all is said and done results are what matter anyway.
On your pareto chart you have identified weaknesses in your trading style. Root cause analysis is how you start to fix them.
First we need to identify the most prominant cause of failed trades. Once this is identified you will need to write it at the top of a separate sheet of paper. Below this you will ask a question. What caused this reaction? Then you list the answer. Now ask yourself the same thing about this new answer. List it. You will continue to ask yourself this for each new answer, until you cannot come up with an answer. Generally, you will only be able to go about 3-5 levels deep. This is your root cause. This is the start of the path that leads to the losing trade.
When you have reached the root cause you have one more question. How do I avoid this root problem.
If it is a emotional problem maybe, you need to work to...
To view and download this full PLR article, you must be logged in. Registration is completely free. Once you create your account, you will be able to browse, search & downlod from our PLR articles database of over "1,57,897+" on 1,000's of niches and 200+ categories without paying a penny. Click here to signup...
