Every year, there is an influx of traders in the market, but only a handful of them are able to achieve success. Why is that? Trading is a very profitable venture, one that has the potential of giving people huge returns with small investments. Then, why are traders struggling? This is due to the fact that a large number of traders simply put in the hours. They think that if they spend enough time around markets, read books, analyze charts and study the courses, their trading skills will improve. Yes, it is necessary to put in hours when you are starting out because there is a lot you need to learn.
However, you need to understand that you cannot increase your profit potential just by putting in the hours. If you repeat what you do, including your mistakes, putting in hours is only going to strengthen those habits. If you wish to improve your trading skills, you need to make deliberate choices repeatedly or else the outcome will not change for you. What exactly are these deliberate things that you must do? Some of them are highlighted below:
- Get some help
First and foremost, you need to find someone who can hold you accountable for the trades you make. Think of them as a trading referee. It is natural for lapses in discipline to occur when you are a part of volatile markets so having someone who can hold you accountable is an excellent way of minimizing these lapses and keeping your losses in control. This individual can be a mentor, a family member, a friend or anyone with whom you have shared your plan and update them regarding your performance. They don’t necessarily have to be a trader.
In most cases, the knowing that you will need to show your trades to someone and explain if they don’t align with your strategy is enough to keep traders in check and helps in avoiding mistakes. Another option you can explore is a forum, a chat room or even meeting regularly with people you respect. You should share what you are up to, the struggles you are facing and what’s working for you. Be open to feedback. It is possible for anyone to be distracted and get sidetracked and you need to be ready to listen to it. If your own discipline and self-awareness fails, you will have someone to keep you in check.
- Don’t listen to others’ opinions
It is perfectly fine for you to discuss your performance with your trading referee and talk about strategies with other traders. But, it is important to avoid the opinions of others for specific trades. You have a trading plan and you should trade it your way. Don’t pay attention to the fact that a trader you respect is planning to buy even though you are selling. Stick to your own plan because that’s how you will determine if it works for you and keep your stress levels low.
Your stress levels will rise and your performance will suffer a blow if you constantly change your mind because of what the news, other people, TV or the websites are saying. You have to rely on your own plan because even the most experienced traders are known to make mistakes. When you are trading, it is best to avoid discussions if you think they will prompt you to second-guess your positions or abandon them altogether. After all, you have spent considerable time and energy in developing a strategy so you shouldn’t let someone else ruin your effort.
- Practice on a regular basis
On the surface, a strategy may come off as simple, but in live market conditions, implementing even a simple strategy is difficult. Every trend, every day and every pullback is a bit different; nothing will look the way you have read about. You need to get in a lot of practice if you want to be proficient in implementing a strategy. This is where a demo account can be helpful as it allows you to practice your method until you see a profit from it.
Drills are done in sports for creating muscle memory so people can act instinctively when the time is right. If you have had enough practice with a market strategy, you will be able to implement it at the right time in fast moving market conditions. Lack of practice will cause you to make mistakes or miss you chance altogether.
- Select a broker carefully
Online brokers are plenty and they will offer plenty of incentives to lure you in. Yet, you cannot take this choice lightly because the availability of certain features, tools and services can make a difference in your trading performance. You need advanced charting and graphing tools and a horde of others that can aid you in performing fundamental and technical analysis that can be vital to your trading. Therefore, this decision requires research. You can check out 10-Capital review and that of other brokers to see what they are offering and then make a decision.
- Mental clarity is important
Every day, before you start trading, you should take a minute to ensure that you are feeling focused, clearheaded and present. You need to be fully focused on your trading and not be worried about anything else at all. Think of your trading plan and take a look at the economic calendar so the events don’t take you by surprise at any time. With these small steps, you can actually save thousands of dollars. If you are upset, angry or unfocused, you should avoid trading. It takes just one trade for you to lose your whole account if you are not in the right frame of mind. You need to take a couple of minutes to prepare for your day. Before you begin trading, a state of mental clarity should be fostered.
Remember that being a profitable and successful trader requires constant work and it is only possible with deliberate and repeated actions.
