Some people – those who are not traders in most cases – that trading well is all about luck. It’s about picking the right trades at the right time and putting the right amount of money into them. Even some newbie traders feel this way; there’s nothing to learn, there is no skill involved, you can just get started right away and, assuming luck is with you, you can make money.
Of course, it’s not really like this, and any successful trader like Carolyn Boroden will tell you that from the start. Trading is not all luck and chance; it takes practice and it takes perseverance. You will make losses, but if you do the groundwork and don’t rush, you should make many more positive trades than bad ones.
So if trading isn’t about being lucky and taking a guess at what avenues might bring you a win, what is it all about? How can you be a successful trader? Here are some tips to ensure you work on your trades in the right way; put all of this together and you should become a successful trader who not only does well but who enjoys the process too.
Know Your Trading Edge
It’s incredible how many traders start their trading career without any idea of what they are looking for or where they want to be heading. This is like starting a journey without any idea of where you are going; without a direct route, you’ll get lost along the way, and you might give up the idea of your destination (assuming you have one in mind) altogether. Blindly plunging into trades without knowing why is a definite way to lose money and lose any enjoyment you might have had in trading.
Just as you need to know what direction you are heading in when you start a journey, you need to know what your strategy is in trading. This is your roadmap, your set of directions to help you achieve your goal of being a successful trader. Without knowing your strategy or trading edge, how will you know which trades are good and which to stay clear of?
Traders without a trading edge will keep switching from strategy to strategy without ever really getting to grips with any of them, or understanding how any of them work. They’ll try something once, see it wasn’t successful, and move on. In reality, this is not how it works. Instead, they should research the different strategies and determine which is going to be best for them. Then they need to concentrate on that trading edge, honing it so that it suits them perfectly. This might lead to some small losses in the first stages, but eventually it should all even out. Using a demo account at the start is a good way to iron out the problems and come up with a strategy that works for you.
Have A Routine
The word ‘routine’ may not sound like a fun one, and it may not be something you want to do when it comes to trading. After all, many people choose to trade so that they can step away from daily routines and become freer, creating the ultimate work life balance. The thing to remember is, unless you are entirely financially independent, there must always be a routine, and this is true in everything, even if you want to be a successful trader.
The ‘boring’ part of trading is the part that will set you up for success and make the overall experience much more enjoyable, so having a routine is important. This is what will set you apart from those traders who are more interested in getting rich quick than setting up a way to make money for life.
Learning to understand and even love the routine of trading is something that practice and dedicated research will help you to achieve.
What is this routine exactly? This is the part where your trading strategy turns from a good idea into a fully realised trading plan that you stick to no matter what. This plan is how you make good trades, and deviating from it because you are bored, itching to trade, you’ve been told about a great trade coming that you just have to get into, and so on, will only cause you problems. Everyone trades differently, and everyone’s plan – their trading chart – is different too. Work on yours, don’t worry about anyone else’s. Do what yours tells you once you have made it exactly how you want it, and you can be a successful trader.
Have The Right Mindset
Trading requires a lot of patience and understanding of how work and what you want from them. However, that’s not all that trading requires, and this point is why not everyone is a successful trader; you need to have the right mindset to go along with your studying and planning.
The right mindset for trading is about stay disciplined and only trading when it makes sense to do so, for example. That means not panicking because you haven’t traded for a while and rushing into something – if you trust your chart and it says not to trade, don’t do it, and feel happy not doing it.
In other words, you need to look at trading as a tool, and not become emotional about it. Don’t worry if you haven’t traded for a little while; it’s not a prerequisite to trade every day to be a successful trader. Plus, if you do lose, don’t throw yourself into a frenzy of trading to try to make the loss back; you’ll only make it worse. This is why it’s important to only trade with amounts you are able to lose; that way, you’ll be much less emotionally invested, and you’ll be able to continue with your plan even if you do suffer a small loss.
If you feel that you are getting too emotional about trading and likely to make mistakes because of it, step away for a while. You won’t ‘lose your knack’ or forget what to do. Instead, you’ll come back ready to work on being a successful trader.
Conclusion
Two aspects have to combine to make you a successful trader. You need to put the work in (because the luck that people on the outside see all comes from the hard work behind the scenes; it’s how actors become ‘overnight successes’; they worked extremely hard for many years) and dedicate your time to learning about trading and creating the right strategy for you.
You also need to have the right trading mindset. You need to think of this as a way to make small increments of money with each trade, and not to become emotionally invested or believe that you can make a fortune immediately. Leaving emotions and dreams to one side means you can focus on the job at hand, and slowly but surely become more successful.
