It has been my finding that new traders in any market do not succeed because they are flat out lazy. The statement that 90% of traders fail could quite possibly be true. But of the 90% of the traders that fail, 100% of those traders either fall in the category of lazy, have no persistence, or can’t handle the mental roller coaster.
It has been my finding that new traders in any market do not succeed because they are flat out lazy. The statement that 90% of traders fail could quite possibly be true. But of the 90% of the traders that fail, 100% of those traders either fall in the category of lazy, have no persistence, or can’t handle the mental roller coaster. It’s about time that I present to you my not so secret strategy towards achieving your goal of becoming a great trader.
Knowing you’re not going to get rich quick will go a long way
I understand that everyone invests to make money. Some just have unrealistic goals and a greed that would make the Grinch cringe. I have encountered many of these in the forex forums I frequent. These characters are the ones who come in and post for the first time asking for someone to point a new trader in the right direction of a system that they can build from. This attitude will get you nowhere in the markets because you are already trying to take a shortcut on the first day. If you put in a ridiculous amount of time and effort and can maintain a calm and constantly willing to learn perspective, you will become successful. And with this success you will be able to answer your own question about how much money you will make. Knowing that you are not going to become rich overnight will help you curb the ups and downs and allow you to look at your trades over a longer time period.
There is no substitute for experience
Experience in trading can be described in several different ways. I will give to you a real world example that has nothing to do with investing. I was watching the World Series of Poker and there was a 23 year old at the final table who is a professional player on the internet. He plays thousands of hands every day, and said that even though he is 23, he has played more hands than the poker legend Doyle Brunson. These examples describe experience because of repetition and experience because of age and poker longevity. In investing, I am a firm believer in studying as many charts, candlestick patterns, indicators, books as you possibly can. But there is also something to be said for a trader that has lasted for 30 years. While I think that the 23 year old hard working trader has the brains and potential to be great if he keeps learning, he has not accumulated the knowledge of someone who has seen the ups and downs of 30 years in any market. I would put my money on Doyle Brunson any day at the poker table because of his experiences. I am still amazed at how much I continue to learn every year even though I think I have saturated myself by studying for so many hours.
Know you are going to have a horrible trading streak
This one really hits home for me because I can relate it to another aspect of my life that helped me with mental toughness. My hard working mindset was instilled in me through a hard working father for a role model and my fortunate ability to be a division I college baseball player. I am extremely competitive as you might guess, but I pride myself for being able to be tough mentally when in a hitting slump. There was a time during my freshman year when I was stuck in a 0-30 slump, with no end in sight. Eventually I dug myself out of this hole through persistence and extra batting practice, and not only did I keep my starting job, I ended up having a great second half of the season. This is the same approach you need to take with trading. You will lose 3-5 trades in a row. But if you learn what you are doing wrong(just like I had to fix my swing!) and don’t make those mistakes again. Knowing you are going to hit a trading cold streak goes hand in hand with understanding that you are not going to crack this market and get rich quick. In my forex trading, I came to realize quickly that this is the single most challenging endeavor of my life. And from that moment I was hooked and humbly dove in. I also realized that there was no way that I was going to start this site and try to help others without first being able to back up my talk with experience and results.
Become a student, not a trader
I say this because I think that traders that have been given a system to trade can be lazy and successful. And as a lifelong student with more years of college and student loans then I care to disclose, this really disturbs me. Students don’t have the ability to be lazy and successful, because they will constantly quiz themselves on whether they could have mad each trade a bit better. I wrote an article earlier about why I don’t use an automatic trading system. Is it because I can’t program it? No. Is it because I’m afraid to trade this way? No. It is simply because if you are out golfing and your system is trading for you, the chances are you are learning absolutely nothing. True students ask questions like, ‘What do I need to do to become as successful as this trader’? And if he is fortunate enough, a real teacher will guide will them in the right direction towards trading enlightment. But I’m warning you: Even if you were to be coached by some of the top traders in the world, eventually you will develop a style of your own that will mirror their lessons, but not their exact trading strategies. That is when you know that you are ready for the real trading world. I have taken every bit of advice I have ever been given about being a successful trader and stored it in my mind. Some are stored in the back because I didn’t find them effective for my style, others are front and center in my thoughts with almost every trade. I was able to ask the right question here, and I have reaped the rewards. Cheers, and good luck towards because as successful as you want to be.