Once again, I was inspired by one of Bella’s post entitled So you want to be a pro trader. To summarize his post he spoke about how having experience propels further success. That as the manager of a team, he looks for prior experience and/or success in a candidate. He stated, “Be that candidate who walks into an interview and drops a few profitable years of trading records on the desk of a partner. Then sit back and wait for him to pitch you.” Unfortunately, most of the traders I’ve meet both successful and possible in debt from trading activity have one consistent environmental factor in common. They were alone, without expert help.
To take a math example… Most mathematical concepts are very intuitive such as the pathageon theory (a^2 + b^2 = c^2). Socrates, the great philosopher, explained this very concept to a uneducated slave boy in his dialog with Meno. However, without Socrates how long would it have taken the slave boy to understand this concept? In parallel, how long will it take you to understand how to be successful in the market without guidance? Some people will be able to do this, but as history demonstrates most will not. How can you be that candidate who drops a few years of successful trades on the table? Here are some basic ideas that I will expand on in future posts.
- Find other traders immediately! There are groups on meetup.com, put an ad in the local paper, and scour the web (craigslist for starts). Find traders interested in improving their trading skills. Where there will be a participatory process of reviewing trades, open honest communication, and dedication to improvement. Remember profitable trades do not always equal to good trades.
- Be Mindful! Review your trades from one, two, three weeks ago and see if you would make that trade again. Was the Risk/Reward inline with your comfort level? Is this a setup you will be able to find again? Did you make this trade on nerves? Be conscious of how you feel and what you are thinking always. Write these down in your journal
- Journaling. Keep a journal of your trading history. The thoughts, feelings, ideas that were coming through your head as you took each and every trade. This practice will make you aware of your thoughts and ideas that worked and didn’t work.
- Having a Plan. Simple put… Where to enter, where to exit, and where you’ll take a loss. ALL three must be present. 2/3 do not equal to a good trade.
- Play Book. What setups do you have ready each day as you sit down to trade each morning.
These are the ideas that I believe are a formula for success. Being a daytrader is so F-en hard because we are usually alone, lack insight into our behavior, and do not have a plan or a plan we truely believe in. Having two arms and two legs that can make fists and kick does not qualify you to fight in the UFC. Likewise having money does not qualify you to trade in the market. Would you fight Wanderlei Silva, Mirko Filipovic, or Fedor Emelianenko during your first year of training? You’re trading against some of the best in the industry we can’t forget that.
Train hard… cause he/she did