It has been enjoyable writing these articles. As you might have guessed it is a bigger task for me to write than to trade; but it was not always this way. I didn’t take up trading one day and then the next day I was successful trader. There were many bumps in the road to get over. Anyone can learn to trade, but the majority of new people to trading don’t learn. About 80% fail in a year according to brokerage studies. My take on this is that it is because they do not learn. They approach every new trade as a ‘hopeful’ profit opportunity, but they do not know how to manage it. They do know know the best time to buy it, and they don’t use a target or stop. Their trading plan can be summed up as, “I want to make money”. Most of all they don’t realize that trading is more about them that the stock market.
Their expectations are too high at first. If they were playing baseball they would expect home runs with each at bat. I trade for a living and I have learned steadily over many bumps in the road that have taken place over a decade. But the lion’s share of that learning was in the first half year as I put together my trading plan. It took about a week for the trading plan followed by some paper trades. Then the rest of the year to get better at it while trading small size. All of the tweeks and changes were about me and what I was doing.
The purpose of writing these articles was to share things I have learned over this time related to trading that should help anyone taking the time to read and think about them. The most important of these articles are those that dealt directly with education on how to actually trade, and how to create a trading plan. Links to each of these articles has been brought together in one place to make finding them easy.
They are excerpts of the most important parts of a book that I wrote to help newer traders that I interact with. It takes some time to read them of course, and some time to think about what you want to do.
Most people do not realize that the markets are very fair. They really are in the long run. The markets pay amateurs like amateurs and professionals like professionals. A true professional trader will get paid like a professional, regardless of market conditions. Professionals survive the rough spells and do very well during the good times. An amateur with a good system might do better than one without, but if he trades like an amateur, the system he or she bought won’t save them.
We all trade differently when it comes down to it. This is why stock tips don’t work for most people. They don’t know ‘when’ to enter, or ‘when’ to get out. They don’t consider the motivation of the person giving the tip. If 10 people in the same room bought the same stock at the same time, there would be 10 different results after they all sold it, with some losing and some winning. Now take the winners and choose one of them that does the same thing each time and you may have a good trader. He or she has a plan. It is not random.
Because there is almost no barrier to entering the markets any person can get started as a trader very easily. The fact that it is a true profession is often overlooked. Many don’t realize they are trading against professionals. It is incredibly easy to get into trading and there is no required training or preparation before you put your hard earned money at risk. Trading is a challenging profession, one that requires both technical, and business skills. Along with personal disipline. All of these can be learned.
There are seldom two people that have exactly the same trading plan, but major elements are often the same. This is because the over all strategy may be the same, but the time of day, time frame traded, and many smaller elements that make a difference could cause one to take a trade where another would pass. These articles will walk you through these elements and help you make choices that fit you.
These that are most successful in the stock markets are specialists, not generalists. They do not try to do everything. These include the smartest, most motivated people on Wall Street, and they are backed with the deepest pockets. They do one thing – over and over and over. This should make you consider what your approach to trading or investing has been.
Here is the article with the links that could help you trade better.
Trade with a plan.