Well, i can say that traders face a lot of problems in their journey. The career is full of ups and downs. Some people make it to the end and some people don’t. Some people lose it all and some people make a fortune. I remember in math’s class i used to get 18% maximum out of 100% and every month i got caned and on the same time some of my closest friends and room mates got A’s and B’s. I tried memorizing some equations and formulas and yet i got 36%. The problem is, i never got to solve my own problems the right way. Even when i realized that i am going to fail in the finals i still choose the option to memorize instead of understanding. It was simple the tweak to the problem that I should understand and not memorize.
Same applies in trading, the more you delay solving your problems in the right way is the more you continue losing money. The moment you get the aha moments that i am doing it the wrong way, You will never lose money again in trading.
Everyone’s trading is different. No two traders are the same. Your watch list, your signals, your chart software, your broker, and your commission costs are probably all very different from mine. Also how your edge plays out can be a different path from my own. Do you need speed of execution to scalp quick trades, or a trend, or a dip to buy? Your expectations for returns and the patience you have with your equity curve will be different from most other traders. Every tiny detail of your own trading plan, system, and method can be different from everyone else. My answers may not be specific to your own trading of entries and exits but they can be answers to the bigger questions of the right psychology, risk management, and the overall process of systematic trading. I can’t fix your own trading for you personally, no one can trade for you. We all have to take our own trades and accept their outcomes. I can help new traders in their overall path of solving their own trading problems that cause them to be unprofitable. While all of us trade differently the larger principles to profitable trader are the same. The answers to “How can I become a profitable trader?” are the same. Trading a quantified profitable system with discipline and proper position sizing.
FOLLOW THIS AND YOUR TRADING RESULT WILL CHANGE DRAMATICALLY.
Here are the first and most important lessons that a new trader needs to understand. All traders have to learn these lessons either the easy way and learn them from others or they can learn them the hard way by losing their own money.
- Do not start trading until you have a quantified trading system with and edge.
- Trade your system with consistency and discipline over the long term with perseverance.
- Every trade should have a good risk/reward ratio on entry. Your stop loss versus your profit target should give you the chance to make $300 for every $100 you risk.
- Always go in the direction of least resistance for your trade. Stay on the side of the trend for your timeframe.
- Trade position sizes to bring your risk of ruin down to close to zero may be 1-2 per cent max.
Profitable trading is built on the principles of math and psychology that work over the long term not opinions, predictions, ego, and luck.
“If you diversify, control your risk, and go with the trend, it just has to work.”Larry Hitte
THANK YOU FOR TAKING YOUR TIME READING THIS. Don’t forget to share to brothers and sister out there.
Have a great weekend