Hello traders, today we are going to talk about a very delicate subject.
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How To really become profitable?
The average human is not wired to properly trade the financial markets..We are wired in the worst way to be a consistently profitable trader. trading goes against the human psychology. To all those learning to trade the financial markets, this game is not what you think it is. Most books and courses simply do not paint an accurate picture of the reality Most of traders think the only way to become profitable is by working hard and focus in the technical strategy.
The truth is that all of that is absolutely wrong. Here’s a list of 6 elements that from my experience are game changers to slowly extract consistent profits from the market. Do us a favor and share another in the comment section that you believe is important. Our goal is to make from this post a place to help us each other from our experience.
Risk Management
That is the number one killer and doer.
for most traders; they open a position size much larger than they can handle or much larger than what is appropriate for their account size. They want to make miracles with small accounts. Do not chase the money , chase the skill. In that way money will eventually come. There are investors ready to trust you 6 figures if you prove them you can handle it like a pro. The problem is that by not really managing your risk you will let emotions run your perception. When emotions increase , accuracy decrease. Trading is a Game of probabilities you can do everything right and end up wrong and you can do everything wrong and end up winning. Make sure to have a proper position size and manage your exposure or you will have nothing left to manage.
Proper Psychology
After all these years, I would say that the majority of trading the financial markets is primarily a psychological painfull skill. It is not an advanced holy grail system or strategy. For most traders trying to chase consistency, they believe their system always needs changing, and they focus more on the “analysis” side by reading more books and taking more courses, hoping to find that secret system. The system can be based on a coin toss, and with the proper psychology, this trader can outperform a psychologically-flawed trader but is using one of the best analytical methods. There are many psychological aspects you should focus. We can talk years about it. I advise you to read Mark Douglas for that. One of the most important things is to Dissolve all your fears. You must understand how it runs your trading. Understand and have a deep talk with yourself to see the way fear control your mind. Fight against Fear of being wrong , losing money , distribute profit, missing out . By other side you must understand the neuro associative conditioning that created good trading habits and self destructive habits.
Discipline in healthy external habits.
Poverty is a habit / wealthy is a habit / life is a habit.
As Paul Sartre said, we are our choices. What we do with our 24 hours will define the kind of person we are.
This is all about changing and adopting proper habits in your pro and personal life.
If you do have side issues like bad habits or (girlfriend / parents /friend / work etc.. ) they will make it difficult to execute a proper system in your trading. All those bad vibes will send resistive energy and when you get this energy you can either shut down or step through and doo exactly what you are supposed to do regardless. take care of your personal habits and problems.
Avoid bad habits that drain your energy and focus here are some:
Wake up late vs. early morning
- Partying 24/7 vs. Learning
- Being lazy vs. being a doer.
- Social media vs/ productivity.
Etc.… Before getting serious with trading, I I used to have a lot of bad habits that honestly, I’m not proud of it. But everything can change. The more I fall in love with the process and taking care of my habits and more my trading improve and happier I become.
Think in term of probabilities
Mismanaging risk is a bad habit
most of traders have the worst trading habits because they asume the outcome. They assume they know what the outcome will be, so they bail out of trades. They think it will make them more money, so they risk more equity because they believe this trade is a high probability one that it will make them money. They have a trade by trade approach.
They assume that after a few wins the next trade is likely to be a winner, so they are double up. They assume that after a few losses the next trade is likely to be a loss, so they do not execute
By adopting simple proper ”SERIES OF TRADE APPROACH” your outcome will change and you will become profitable.
t it is the approach that a few minority of the traders use. This approach is not based on predicting anything; rather this is a precise pre-defined system of pulling the trigger when your system or edge presents itself, and the outcome of the trade is irrelevant.
We take a series of trades, and we are entirely focused on the outcome of the series, and NOT the outcome of each individual trade. The outcome of each trade and attempting to predict the outcome of each and every trade is an uphill battle because humans are designed to expect what they predict. It is difficult to implement your system or edge in the markets flawlessly if we become attached to any one single prediction. The truth of the matter is that we do not know what will happen next; the only certainty is the markets uncertainty.
Having your own personal predefined edge
In fact. you need a plan , you need a strategy and you need a flawless execution. there is no doubt either it works or no. make sure to set rules to find good trades execute those good trades and let those good trades play out.
Laser Focus learning curve
Those who make it in this business were laser-focused; they made a decision to either be right or wrong. A laser shines a coherent beam of light and is powerfully focused on a single point. That point will undergo immense heat or pressure. Same applies to learning to trade. It requires all your energy to be put forth on a single objective.
Compare this with a light bulb or the sun, which shines its rays outwardly with its energy distributed in all directions. You will barely feel the heat as the energy is unfocused and dissipates accordingly. This applies to those traders who have issues They doubt their decisions and jump from one strategy to another they chase the holy grail they change from system etc….. Focus in one pair or few pairs, one session , a clear defined profit system a clearly defined type of trading.
Make a decision, and instead become focused like the laser beam on what it is that you desire to develop, and you are more likely to achieve your target.
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