Bulls make money, Bears make money and Pigs get slaughtered.
Have you been tempted by offers to purchase highly complex trading systems that promise you the Earth but invariable leave you with nothing but a hole in your wallet. Even well designed trading systems can be lethal in the hands of an inexperience trader. Why is this? It is a combination of inexperience, lack of education and bad psychology. Just because you have read about brain surgery or even watched it on the Discovery Channel does not mean you can perform brain surgery.
It is the same with trading as you need to understand the system and have the psychology to push the button at the appropriate time. In our assessment your own psychology is where the battle will be fought and this battle will dictate if you will become a successful trader or one who just likes to talk about it. Most successful traders when asked always focus on factor which made them successful. That is getting their brained wired correctly. Trading is at least 80% about psychology and trading as a business is actually totally different from any other business you may attempt to manage. Even if you are a serial entrepreneur success story there is no guarantee that you could make the transition to trading.
This article will explain some short cuts which will help you achieve trading goals if you decide that this is the career you wish to pursue.
The nine steps to Heaven
Get educated
You must invest time in reading books and trawling through the Knowledge portals that you will find online. These will include free content from brokers to video presentations. Much of this is free and informative. It is however a patchwork which only you can really build into a logical trading strategy.
Be Healthy
As a good friend once told me, what is the value of money if you are not healthy? You need to be a trading athlete. Every day you much hit desk with a clear head and healthy heart. With a your health taken care of you have one less thing to worry about and in turn focus on your business.
Make the most your time
Life is not a rehearsal and although time runs at the same speed for everyone, what can be achieved in that time can vary from person to person. Make the most of your time. Don’t spend hours or days on end nursing a losing position in the hope that it will turn your way. Use sound money management techniques to close losers early and take profits off the table.
Don’t keep your friends and family too close.
Having good friends and family support is important and trading can be a lonely and at times hard business. However, friends and family can at times have and over bearing influence on your thoughts. Where possible avoid asking for advice and formulate your own ideas and plans.
Be true to yourself
You pride yourself on your integrity and professionalism. Apply this to your trading and be honest about your performance.
Build your own strategy
You must not only fully understand your strategy but it must suit your character. There is no point trying to be a scalper when you do not have the patience and nimbleness to trade this way. It is much better to back test and write your own strategy. Open a demo account or even build your own expert advisor.
Get into a routine
It might sound boring but trading takes a lot of discipline. If you are a creature that likes routine then you are more likely to be a successful trader. The idea of being a fighter pilot may sound very sexy but even the guys at Top Gun go through their check lists.
Be a mental gymnast
It is important that you have a strong mind as at times you have to fall back onto your mental strength when the market wants to take you out of a winning position. However, it is also important to have an open mind. You need to be able to quickly take in new ideas and adapt to changing events. Your brain needs to be wired for sharpness and speed of logical action.
Trade through the pain
You are probably not going to make a fortune overnight but there is no point in giving up on the sight of your first draw down. If you want to survive and eventually make it the trading then you better be prepared to take a few hits along the way. This will include trading you’re your way through the pain and coming out of it battle hardened and above all experienced.