50 Ways to Become a Better Trader – Without Looking at a Price Chart
Being a successful trader takes discipline and tenacity. It’s not a function of being the smartest person; it’s more about having a system and sticking with it, no matter the external or internal challenges.
External challenges mainly revolve around volatile or unexpected markets. These can unsettle the most experienced of us but there are many ways to deal with these factors.
Internal challenges are what happen inside your head: the temptation to switch gears unexpectedly or to pursue the next shiny object.
Here are 50 ways to let neither distract you:
- Focus on winning. Never place a trade if you expect to lose.
- Manage wisely the percentages you can lose on a trade. Losing 50% takes 100% uplift to get it back. That’s a great year of trading to make up for one bad trade, so don’t take risks that will be too hard to make up.
- Have a sound strategy. A trading strategy is similar to a recipe. Combine multiple ingredients together to get something much more powerful than the individual items.
- Specialise. You don’t need hundreds of trading strategies, just develop a few and then stick with them.
- Believe you can win in the markets. To gain more confidence in the trading profession trading, read Market Wizards by Jack Schwager.
- If you do not believe you can succeed in the markets, stop reading this list.
(Everyone else, let’s continue…)
- Spend time with people who support and encourage you. Additionally, see #8:
- Never talk trading with people who think you will fail.
- Accept full responsibility. It is never your broker’s or the market’s fault. You are the one who is pulling the trigger.
- Take charge. Be your own boss. Don’t place other people’s trades.
- Trade with money you can afford to lose, but plan to build wealth over time.
- Trade with your own money. Never borrow from friends, family or banks. It just adds pressure and trading is already hard enough.
- Learn to trade with small amounts of money. It is not true that you need a lot of money to make a lot of money. Learn to trade with a small amount. Larger amounts will follow as your expertise grows.
- Take holidays and other breaks. Just as in any profession, it is important to recharge your batteries.
- Ease back in after a break. You wouldn’t run a full marathon the day after a break. Treat trading the same way; it is a demanding profession.
- Take the time to learn well. You don’t become a doctor, pilot or astronaut after a two-day course. The same is true for trading.
- Have realistic expectations. Most people overestimate the speed with which what they can succeed in the markets. But they also underestimate just how much they can achieve if they give themselves time to get good at trading.
- Have a second income. Even the best fund managers earn a management fee before taking a split of profits. That is two incomes; one is guaranteed and one is variable. Whether it is a day job, a part time gig or a management fee… do the same.
- Always use stop losses. No exceptions.
- Visualise. Winners in every endeavour in life expect to win. They “see themselves” winning. Take five minutes each day to see yourself winning in the markets.
- See the end result of your winnings. Take five minutes each day to visualise the things you will have when you achieve your trading goals.
- Associate with peers who are more successful than you. They will push you to new levels.
- Commit. Success in trading is unlikely to come from frequent changes in strategies, markets, or brokers. Success comes from finding the best focus for you and committing to it long term.
- Develop a plan that you can print and stick on your wall. Do away with multi page trading plans that are too long to print and never get re-read.
- Aim for consistency. If you consistently lose, make small tweaks to your plan until you consistently win.
- Stick to your plan. Small tweaks are okay, but if you find yourself making major changes, that’s not sticking to a plan. Your plan has to expect some volatility and market surprises.
- Harness the discipline you use elsewhere. Sticking to your trading plan is no different than going for a run, giving up smoking, or eating well. You can do it if you choose.
- Read the news. Know the facts. Then form your own opinions.
- Avoid others’ opinions. They are often biased and easily misinterpreted.
- Balance opinions. When you do see market opinions in the news, be sure to seek out an opposing view.
- Have a routine. You don’t win Olympic gold by having a night out drinking and skipping breakfast. Trading is high performance, too.
- Record your best trades. Review them regularly. Emulate them
- Record your peak moments. This applies to your life, including trading. They will give you insight. Emulate these times. Visualise how confident you felt at the time.
- Learn from your mistakes. Tweak your rules if necessary. But don’t dwell on your mistakes; move on. Winners learn and losers lose.
- Admit your mistakes. The first step in learning from your mistakes is to admit that you made one. Many traders never succeed because they can’t recognize or learn from their mistakes.
- Choose your mentors carefully. Good mentors will stick with you, and vice versa.
- Be tenacious. In every profession, the best share one quality: grit. They never give up.
- Trade the market that is best for you. Don’t trade XYZ market because someone else does. Match your market(s) to your personality and lifestyle.
- Trade the strategy that is best for you. See #38.
- Celebrate the trading success of others. If you do this, many will be there to help celebrate with you, too.
- Think like a winner and focus on what you want. Losers, in both life and the markets, focus on what they don’t want and wonder why they get exactly that. You get what you focus on.
- Know when to walk away from trading. Family dinners, weekend sports, and rest/bed times deserve your full engagement. Don’t trade, and don’t check the markets. Be present.
- Keep your chin up. As certain as night and day, trading will provide good times and bad.
- Deal with problems but never dwell on them. Create a solution, tweak your rules, move on. Remember… make small tweaks, not major changes.
- Reap the benefits of your chosen profession. Traders have freedom and flexibility, so enjoy the lifestyle your chosen path offers. Don’t be glued to a screen all day.
- Breathe! If you are not yet a fan of breathing exercises then commit to trying them for 21 days. It can be as simple as focusing on deep and slow breathing while you visualise your trading success each day. Once started, you will never give up.
- Grow. Build muscle memory. You never know when you might need it.
- Keep learning. Keep on learning to trade and you cannot fail; it becomes nearly impossible. Plus, learning has numerous side benefits.
- Understand that you deserve success. Many new traders struggle with a psychological barrier of making money for seemingly doing little. Make the money with gratitude, and use it to add value to the world. Feel great about it. Repeat.
- You just passed the test! If you read this far, you are a person who has the odds stacked in your favour. You are determined to study, learn, grow, and win.