My 3 Secrets To Trading Profitably And Professionally
GENERAL DISCLAIMER:
THIS IS PERSONAL AND FROM A PERSONAL PERSPECTIVE AND AS ALWAYS THIS IS NOT FINANCIAL ADVICE IT IS WHAT HELPED AND HAS BEEN HELPING ME GET TO WHERE I AM
THE TRIANGLE OF TRADING SUCCESS
Think about all the profitable traders making money from trading everywhere from Warren Buffet to all the retail traders (like me) that has become profitable. All of these profitable traders have these 3 things in common.
1. STRATEGY: They have found a strategy that makes money over time with above a 50% win rate with more than a 1:1 Risk-Reward Ratio and if you can consistently do that, you will be profitable in terms of your strategy but that doesn't mean you'll be profitable if you don't understand the next step which is...
2. RISK MANAGEMENT: Without a good risk management system, just having a strategy won't work and you can risk blowing your account in the process. Even if you have a good strategy you can end up having loosing streaks and drawdown and if you are risking upwards of 5-10% of your account then, that upwards of drawdown at that losing streak will either be too much for you to emotionally handle or continue trading the strategy and if you are up on the spectrum of risk at 10% with 10 loosing streaks or trades (not likely but possible), then you can just blow your entire account in a loosing streak without realizing that risk management could've made you a profitable trader. But if you are risking 2% or less on your account trading then over the course of a long period of time, you could've been profitable. On top of Risk Management, the next step is vital...
3. MARKET PSYCHOLOGY OR DISCIPLINE: This is not one of but the most important step to learn, study and master. This will ultimately help you to stick to your strategy because if you have a good strategy that is rules based and that provides an edge over the market and instead of sticking to that strategy, you go out there watching tons of YouTube Videos ad trying every strategy that you learn that someone else is using and just go about randomly placing trades because you have FOMO (Fear Of Missing Out) and you want to be involved in the market and of you are guilty of doing those things, then this is where you need to focus your work and that is on Trading Psychology and Discipline. Read books, watch videos about trading psychology and understand that trading comes with wins and losses and understand that "TRADING IS A BATTLE OF STATISTICS AND EMOTIONS AND IF YOU CAN TAKE THE EMOTIONS OUT, THEN TRADINGIS JUST BASED ON STATISTICS." We are just looking to have a way of making money over a long period of time. We are looking to place trades in a consistent way to provide a full-proof money-making-edge over markets.
ENDEAVOUR TO BE A STATISTICAL NOT AN EMOTIONAL TRADER. KUDOS