Almost every day we have people contacting us wanting to know the ‘secret’ to successful trading: what is it the professional traders are hiding, which black box system is the best one or how can I turn zero into a million overnight?
There is a secret to successful trading but most people don’t like the answer – you need to invest in good training and good software so you can implement your knowledge quickly and efficiently to extract the most out of the markets.
Here are 10 of the key elements we consider essential if you want to make it as a trader:
1. Learn from a trader.
Find a trading mentor. Do not learn to trade from an employee who doesn’t trade for a living but instead works in a company that does weekend seminars on trading.
2. Learn the strategies.
Find complete strategies which define exact entry and exit points, become comfortable with them and become an expert.
3. Buy a good trading software.
Invest in the best tools of the trade – they will help you scan, analyse and manage your trades quickly and efficiently.
4. Practice! Practice! Practice!
Practice to improve – always be looking to trade like an expert.
5. Apply money management.
Managing trades is the only way to take serious money from the markets. Any fool can make money from one or two successful punts, only the experts know how to keep it.
6. Create a trading plan.
Set your rules and follow them – a series of IFs and THENs will help your trading account grow by minimising emotion. Learn to adjust your rules only as your knowledge expands.
7. Trade less.
Less is more – the less you trade the more control you have to select only the best opportunities. Money management will take care of the profits. Only the broker makes money out of scalpers and day traders.
8. Trade the trend.
Learn to find the trends and exploit them for maximum profits. Trades will last longer and your money will grow faster. Don’t fight the market by trying to trade against the trend.
9. Ignore the money.
Don’t trade for money – trade for profits. Bad traders look for monetary targets but successful traders look only to exit when the trend has come to an end.
10. Cut out the noise.
Ignore the so called gurus on television, newspapers and magazines. Their motives will be different from yours. Have your own opinion of the markets and make your trading decisions based on your own analysis, strategy and trading plan.
Many rush to trade the markets without training or using good trading software but the end result is their trading account is quickly blown out. They will often return seeking revenge – and once again leave having blown the account once more. We have always said trading is simple (when you know how) but not easy. To become a competent expert does not happen overnight but with patience and practice.
We hope the above points help you become a better trader and in time an expert.