Wednesday, 12th September 2018
Are you cut out to make trading pay?
At root, successful trading is all about adopting profitable angles, executing them and milking the markets for profit….
And traders who are good at the job can make good money – fast. Faster than conventional buy and hold portfolio investors….
But not everybody is good at the job. And there are no winners without corresponding losers. Somebody must lose….
A lot of people get into trading believing it to be a turnkey profit-churning operation that anybody can take advantage of….
But that’s a wrong-headed notion….
- There would be no burger flippers….
If it were that easy there would be no burger-flippers, no taxi-drivers and no traffic wardens….
Instead, every man-Jack and his dog would be sat at home in front of his computer screen – playing the markets, consistently predicting short-term price fluctuations correctly and banking coin….
The truth is that not everybody has what it takes to make trading pay….
A lot of people are not cut out for it….
They lack the basic foundational skills and characteristics required to make a success of the job….
Are YOU cut out for successful trading? Let’s find out. I reckon you need three key things to make it pay as a trader….
If you’ve got these three things, great. If you haven’t, then you’ll need to take steps….
- You need to be disciplined….
When you’re a trader, discipline is key. You’re going to need plenty of it….
Successful traders have a strategic plan that they stick to like mud to a blanket….
The plan tells them when to go in and when to exit a trade, when to bank profits and when to cut losses….
Successful traders don’t tend to deviate from the plan. They wait for the right signals from the market and they strike when, and only when, those signals appear….
They don’t get distracted. They don’t go off-message. They don’t go off-piste….
There are limitless opportunities to trade a wide-range of products every minute of every single day of the week….
In that environment, the itchy-fingered trader without a plan and the discipline to stick to it is going to find himself sucked into these ‘opportunities’ and drawn into trades he didn’t originally intend to make….
His indiscipline is going to cost him money – unless he gets lucky. And hoping to get lucky is the worst kind of plan to head to market with….
Discipline is a key feature of the successful trader….
Discipline is what keeps him on-plan. Discipline is what helps him develop the patience required to wait for the right moments.
Discipline is the feature that helps him avoid making trades simply because he feels like he should be ‘doing something’….
- You need to be mentally tough….
Anybody who thinks trading is going to provide an ‘as-the-crow-flies’ route to certain profit is in for a big shock….
The theory is attractive. But that’s NOT how trading works in practice….
You’re not always going to get it right. You’re not always going to win. You’re not going to bank profits with every trade you make….
In trading, things go wrong. And they go wrong frequently….
The market is going to throw plenty of losing trades at you. Believe me. You’d better get used to that idea if trading is something you would like to explore further….
A successful trader might only get it right 60 times out of a hundred. In other words, he’s backing plenty of losing horses as part of the process….
Losing hurts. Losing can discourage you. Losing can make you doubt yourself. Losing can lead to you questioning what you are doing….
Losing can erode confidence and certainty. Losing can lead you to short-term thinking. And none of these things are going to help you trade effectively or successfully….
The bottom line is this: to trade successfully you need to be mentally tough enough to accept that you’re going to make plenty of losing trades and tough enough to bounce back when those losing trades inevitably show-up – sometimes in streaks and sequences that would test the mettle of granite….
If you haven’t got that tough kind of mind-set, you’re probably not going to make it as a trader….
Trading is not a game for the faint-hearted. You need some steel to cope with the ups and downs. That’s how I see it….
Trading requires a thick skin, loads of bounce-back-ability and the inner-strength to continue sticking with the plan – even when nothing is going right, and everything appears to be going wrong….
- You need a winning plan….
First and foremost, as a fresh-faced trader entering the markets for the first time, you need to know what you are doing. You need to know the nuts-and-bolts….
You need to know how and where to open a trading account. You need to know how to operate it….
You need to know how to place a trade. You need to know how to get out of the trades you place….
You need to know how to set-up things like a stop loss – which will limit the liabilities on losing trades….
I call all that stuff the basics….
But you also need a plan – the cast-iron strategy that will inform all the trades you make, and which will lead to long-term profit in the markets….
You need to be clear on which trades to make….
You need to understand why those trades should lead to profit….
You need to know where to look for those trades….
And you need to recognize the unique and peculiar market signals that tell you exactly when to press the button and make the trade….
You need the basics – the rudimentary knowledge that enables you to make trades….
But you also need a clear and effective plan – the blueprint to profit that tells you what to trade, when to trade and why….
Without that plan, you might as well forget trading altogether….
- I can help you….
You might already know what you’re doing. You might already have a plan. In which case, good for you. Go for it….
But for most people, and I include myself in this, getting that plan (the blueprint to profit) requires the right kind of education and training….
I can’t help you develop discipline. I can’t help you with mental toughness. You’re on your own there….
But I can help you with the basics of trading and a successful trading plan to go to war with….
I’ve been doing some digging. And I think I’ve struck gold. You’re certainly going to want to hear about it. And I am only too happy to share….
Look out for a special issue of Money Truths from me on Friday – when I will reveal all….
That’s how it looks from here….
All the best,