8 Steps To Potential Trading Success

So you’ve been trading for a while now, had some success and it seems like forever ago that you cracked open your first chart. You’ve learned about the markets; what works and what doesn’t and can carry on an intelligent conversation on most trading matters. You talk a pretty good game and are extremely proud of how far you have come and the success you’ve had on the road to trading profitability. You can even tell where the market is going to go much of the time and know what to expect when it does something different.

Stuck in trading neutral

The big problem for you is, that you still can’t cross the bridge between market understanding and actually making money trading on a consistent basis. You may have even had periods of healthy profitability where the equity curve was on a strong up move, but for some reason those periods are far from being consistent.

So what is the issue? 

Is there something wrong with you or are you just not very good at trading? Perhaps it’s time to throw the towel in once and for all and give up on the dream? I’m not saying that it’s not something you might need to consider at some point in the future, but at this point there’s still quite a bit you can do in order to turn the corner once and for all.

“The will to win, the desire to succeed, the urge to reach your full potential… these are the keys that will unlock the door to personal excellence.” -Confucius.

One thing you never want to do is to stop just three feet from your goal before you have exhausted all avenues to get yourself on the right track. When temporary defeat rears its head, most people pack in their efforts and move onto something else. If you’ve read the book “Think and Grow Rich”, you are familiar with the story of the man who struck gold and continued to mine it until he hit a dry spot.

Thinking the riches had run its course, he sold off the machinery and moved out of town. The person he sold the equipment to had different plans.  Being objective at what he was facing prompted him to seek advice and after the ground was examined, it turned out the other person stopped drilling three feet from his goal. That is not what you want to do.

8 Steps To Reach Your Trading Potential

There are times when you just need the right words at the right time to propel you off to great success.  Perhaps you will find those words in the list below that will take your trading career to another level.

1. Make the commitment to trade professionally

This means to do all that it takes. It means doing those things which you probably already know you should be doing to make things work. This is a professional business, so raise your game.

2. Working with your current life

There are two parts to this.

  1. You need to trade a product and way which fits your schedule. If your day job means you don’t have enough time to trade a particular product or you’re too tired, look to something different which will be a better fit. If the family distracts you, you must find a way to change this.
  2. You must be as emotionally balanced as possible. Not just for trading your plan properly, but also so that you’re “in the right place” to do everything properly.

3. Being able to mentally focus on the task at hand

Moving on from the last point about the family distracting you, you must be able to focus on your work fully. Don’t create things to do. Internet and emails can be a big problem. It’s maybe a good idea to shut everything down other than what you need to trade/work for a time period which you’ve set aside in your plan.

Make sure you also are realistic in your trading plan about how long you can focus for effectively. Make sure you’ve eaten, but not too much. A rumbling stomach is not good in my experience for focusing at all.

4. Take stock and make a plan

You may well know a great deal about the markets and there may also be knowledge gaps. Identify what you know and what you don’t know. Then look at the kinds of strategies you feel might work for you.

Don’t keep banging your head against a brick wall either.

If a product, time frame or strategy is not a good fit for you and your account capital, look at something different. Figure out all the things which you look at and then decide what’s truly important to use.  There’s nothing worse than being bogged down by irrelevant information.

Also, follow your own experience. There’s nothing wrong with integrating what you’ve seen others do in the past, but unless you take ownership of what you’re doing, you’re less likely to deeply understand what you’re trying to achieve. Structure your plan as clearly and as simply as you possibly can. You must know what you should be doing as a trader most of the time. There should be little to no ambiguity in your plan.

5.  Test your trading strategy thoroughly

You need to do some kind of testing in order to understand how/if it works and gain confidence in the strategy you’re going to be using and putting valuable capital on the line for.

Back-test, forward-test, statistically analyze and work out how to trade the strategy and if your plan needs to be adjusted at all. Doing this can give you the confidence in your strategy and the courage to take the next trade when you encounter a losing streak.

6. Organization and routine

To minimize error and build confidence in your own ability to trade a strategy, it’s imperative that you’re well organized and have a routine you’re comfortable with.

Not only will you benefit from being fully prepared to trade, but also it will be much clearer when things are not quite as they should be. It allows you to find that rhythm.

7. Analyzing trader and strategy performance

You’ve got to know what to expect from yourself and your strategy. If you don’t, you’ll not see when there’s something wrong and most importantly, you won’t know how to fix it.

If you don’t keep statistics about trades you took for certain strategies, you won’t be able to analyze past performance. You must also have a sensible way of adjusting your plan if there’s a flaw in it which you’ve identified.

8. Trader psychology

It’s really very important to break bad habits which have become ingrained over the course of either your trading career so far, or possibly even your whole life. Recognizing issues may not be something which is immediately possible, but if you’re consistent in your approach and keep track of what you’re doing, problems become clear fairly quickly.

Leading on from this, it’s important that you understand the consequences of these issues and that you’re in some way accountable so that you might remain resolved to avoid future slips. Building up consistency in terms of your approach and ultimately performance, will help to create new good habits over time and go some way towards eliminating bad ones.

Run With This Success Outline

The fact of the matter is that I could write so much about each of these points. But what I hope is that if you’re truly committed to becoming a professional trader and making the turn, this can act as an outline which you yourself can flesh out with all the details and rules important to your approach.

Committing yourself in this way may not be the easiest of roads to take, but it’s most likely to be the surest. So ask yourself how much longer you’re willing to stand by with the prospect of trading for a living being just out of reach. Take the first step today towards making the turn.

For more updates from Mark and the team at NetPicks, be sure to visit their trading tips blog at NetPicks.com.