The idea of becoming successful in trading seems like an impossible prospect, after all, most people who try lose their money.
A recent study shows that most of the new traders wash out their accounts within the first ninety (90) days of trading. But, that doesn’t mean everyone is losing money here. Success is possible when you jump into it with proper plans and training.
Just like every other business, trading also has some rules of thumb that help you out in becoming a better trader whether it is trading Crypto, Stocks, Commodities, or forex.
Becoming a successful trader is not an overnight thing, it takes years of hard work and consistency to achieve it. If you are new to trading and want to be part of the class of successful traders, then you need to adopt the following traits.
Plan
Trading without planning is equal to gambling. Devise a trading plan where you will define SOP’s of entering and exiting a trade and follow it religiously. Keep making adjustments to the plan to stay competitive. You might be making losses along with profits, but profits will be higher than losses if you follow the trading plan.
One of the most important steps in becoming a successful trader is having a trading plan that includes:
- Entry
- Exit
- Stop loss
- Risk level
- Winning strategy
Before entering into any trade you must know at what price you will enter into it, what will be your exit price and your stop loss. You must set your risk level for how much you are comfortable to lose in a particular trade. The amount of risk can vary but it usually ranges from 1% to 5%. While your exit price should be at least two times (2x) more than your risk. For instance, if you’re willing to lose $1, you should be making at least $2 from it.
Patience
The second important step of being a successful trader is having patience. When you come into the market it's not about making money fast, it’s a marathon, not a sprint. So, sometimes you just sit back and wait for your strategy to give you an opportunity to enter the market.
You don’t always need to be active in the market or always have to have a position going. You do require the element of being patient and waiting for that opportunity to appear. Once you get that opportunity you will have to be patient again, wait for the trade to play out in your favor, and hit your targets.
Remember you don’t have to trade every time in the market. Trading is all about sitting back and waiting for the right time to enter the market. Do not overtrade because overtrading can lead to losing money and your emotions.
Practice
We all know that practice makes everyone perfect and that is absolutely true. Practicing is the key to progressing towards becoming a successful and consistent trader.
Before jumping into any financial market with real money you must practice first. There are many ways you can use to practice for your trading experience. Use a demo trading account or a paper trading account that most of the brokers allow to their customers.
One thing that everyone does while practicing the market is they don’t follow anyone or read any book. They just randomly open and close trades and when they see some profits they start doing it with real money and lose it all. This is not how practice works.
You must develop a strategy that you will be using to practice your trading and then backtest it again and again until it starts to work out for you. Once you feel confident that you practiced enough and have good results based on your strategy /system then enter the market with real money.
Persistence
You also need persistence in your trading career to become a successful trader. As a trader, persistence is critical. Trading can be the best job in the world and it can be the worst. It’s enduring through the tough times, persisting when you are losing that helps lead to success.
The one thing that you should do every time you lose a trade is to learn from it. Find out why you lost that trade and try not to repeat that mistake again. Giving up is not an option.
But, that’s not all, there is a lot more to it. If you want to dive deeper into what will make you a successful trader, I suggest following those few points, along with the 4Ps above.
Takes trading as a Business
Treat trading as a full or part-time business rather than a hobby or job to become successful in. As, if you take it as a hobby, you will not give the required time it takes to learn it, and on the other hand, if you do consider it a job, then you will get frustrated as there are no regular paychecks in it.
Getting Out of Your Comfort Zone
Willingness to come out of your comfort zone and tolerating it is necessary to achieve success in every field of life. Our self-created boundaries don’t allow us to go out of the way to put effort into achieving something. Being a trader, you cannot become successful by following the things that are already in books. You need to try new things, test new things and strategies to see what works best for you.
Non-Stop Research
Research and trading are interconnected with each other. The more you research about the fundamentals and technical side the more comfortable and confident you will be in your trading, resulting in an increase in your trading performance.
Develop Your Own Strategies
You can not get a competitive edge into your trading by following the existing trading strategies available in the books or online as everyone uses them and becomes obsolete. You need to test new things and develop your own strategies to a competitive edge over others.
Protect Your Trading Capital
While trading your first and foremost priority should be to protect the capital, it is not possible to always stay profitable in trading, but you need to cut your losses and let your winners run and make sure to set profit targets and act on the plan.
Take Benefit of the Technology
Having a competitive advantage is the only way to sustain in trading. There are various charting software available offering tons of indicators and algorithms that you can test to create your own trading strategies. Try to be one step ahead of others by adopting and testing the latest technology.
Take Only Calculated Risks
Business always comes with risk and the same is the case with trading. The first thing is to risk only what you can afford to lose and then make sure to take the calculated risk rather than open a trade blindly.
Now that you have all the keys to make every trade count toward your success, why not come and practice on real-life examples? Join me at discord.gg/cryptorand to find what you’re really looking for!
