Where do you start if you want to start trading for a living?
You may be new to the idea of trading in the financial markets, you may be an experienced trader who is looking to strengthen his foundation and become better, I am constantly working to improve, build on successes and streamline my processes. In this universe, there is no such thing as a static, things either improve or decline and I would rather see things get better and better so lets walk through some of the basics and where to start if you are interested in becoming a skilled trader.
I am going to lay out some key areas and then expand on them. First lets focus in on a specific sequence to help you get started on your journey to Trade 4 a living.
Most of the things I will be talking about we can fit into a few broad fundamentals, mainly; Interest, Time, Focus, becoming an expert with your Tools, Knowledge and Execution.
First I would say interest is senior to the rest. With a strong interest, you can accomplish what you seek to do, keeping that interest is key to your journey and it will also help you resolve the stops and barriers that life has a tendency to throw at us. Your continued interest to become a successful trader will help you find the time you need to learn and grow. It will keep you focused and on track to achieving your goals, it will make becoming an expert with your tools easier and help you acquire the practical knowledge you need to become skilled at execution. So, yes I would say the first step is Interest.
Developing an Interest that drives your success
So what is your interest in learning to trade, improving your execution or developing a winning strategy in the financial markets? For some, they may have a curiosity, others a strong desire to become a winning trader. Your interest and willingness to learn and see that knowledge evolve into winning trades will be the main determining factor in your success and speed that you acquire and apply the knowledge and skills you need to be a successful trader.
I suggest that you define what your interest is, and expand on it, what you want to achieve and by when do you want to achieve it. This is more than a goal but it is you expressing your motivation. I suggest you write it down daily, it can change it as you learn and grow but this practice helps reinforce that motivation. Defining your interest and purpose for becoming a winning trader will help align your actions and attitude to becoming a winning trader.
Investing your time for exponential returns
Learning to trade, studying and understanding the market, developing your strategy refining your tactics and execution takes an investment in time. Some choose to devote a few minutes a day, others jump into it and dedicate the majority of their time to become a success. I have seen some successfully execute their strategy with 30 minutes to an hour spent reviewing the markets studying charts and working out their next actions. Granted this was after some time and diligent practice. Others spend a large amount of time carefully monitoring the markets and their trades and enjoy it.
Becoming a successful trader takes time, it is an investment in your future.
Work out when are you going to:
- Study
- Watch and study the market
- Plan out your trades
- Build your strategy
- Execute your trades
Some of these are best done concurrently. If you are Studying to learn about the market, a strategy or learn a tool its best to do it while looking at market data and learning it for application so you can double your results and cut your time in half.
Purpose-driven Focus
To be successful in anything you need to be present, you need to have your attention and intention on the activity you are engaged in to trade successfully. I have seen too many people entertain the idea that they can do many things at once, but most of the time it just results in them doing many things poorly. Learning the skills you need to acquire and the ability to be successful needs your attention on the task that you are doing when you are doing it. This also means focusing on the things that are important, it is easy to get caught up in small things, and distractions and lose your focus.
Skilled professionals develop their ability to focus and see the important and can disregard the unimportant. This takes time through experience to develop and further refine what is and is not important. Looking at and finding what is creating results and focusing on that helps keep you progressing in the right direction.
Becoming an expert with your tools
You probably have more tools that you interact with than you might at first realize no matter what your profession. In trading, these are your trading tools, what you use and interact with as a trader.
Knowing and being expert in the software you use would make you more efficient at using it, you would better understand its limits, its strengths and weaknesses. That would build your confidence in the data you are provided and give you an edge on the other people trading in the market. It is not hard to become skilled at the tools you have, it takes an applied practice and interest in becoming better with those tools.
These are some of the common tools that most traders interact with on a daily basis:
- Brokerage platform
- Charting software
- News platforms and websites
The systems that you used to track your trades and paper trades/simutrades (simulated trades or paper trades – trades you practice your strategies on)
I am sure you can probably list out a few more, and I would suggest becoming skilled with the computer system that your other tools run on as well. Anything that could cause a pause or delay in your ability to enter or exit a trade could cost you a significant amount of money, and knowing your tools well will help you navigate around any issues that could cost you money and will help you make successful trades.
Knowledge
What do you need to learn know and then have practical knowledge of to be successful? Here are a few things to start:
Market Basics – Understanding the basics that drive the markets so you can make smart decisions
Strategies – The ways you trade that you develop to be successful
Basic money management – how you manage your wins and your losses to stay ahead as a trader.
Execution
This falls into how you execute your strategy, your mindset as a trader, and money management. This becomes a system that you refine and execute, it is something that takes practice, both with paper trading and then when you are trading a live account takes even more pratice to follow and improve your system.
I large part of execution is keeping yourself accountable and executing your plan.
Lasty once you get started you want to think about putting in some safeguards. You have to have multiple ways to enter and exit a trade regardless of what is happening. Having redundant systems, computers, cell phone app to place trades, surge protector, a generators, even a 2nd brokerage account can be safeguards that allow you to execute despite unexpected events. This is part\ of how you execute as a successful trader, some of this can be easily setup from what you probably already have, other items can be purchased as you grow.
