A Student of mine told me this “I am doing great when doing paper trading but when it comes to trading in the real world, I am still not winning as i am expecting myself to be.”
The hard truth all traders eventually learn is that trading is far more difficult when you sit in front of your trading terminal with real money even if you have a very effective trading strategy.
There are 3 basic things we need to develop over a period of time to be a good trader. They are Mind, Money and Method. All there should be in sync if we want to succeed. You have the best strategy but not having mental discipline it will not work out. All 3 are MUST to be successful trader.
Lets discuss all 3 of them.
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Method
We first need to have a Method. A method can be Technical analysis, fundamental analysis or plain gut feeling. The key is you must have a working method to attain success. Every method must be measurable, objective, and easy to verify. Your method should be so simple that If you teach them to 10 people they can easily understand, Our Brain like clarity not confusion and chaos.
Traders who trade strategies or systems that require them to have tons of indicators are generally over-analyzing their trading and thinking too much which in turn create confusion and trader is not able to pull the trigger when the time comes.
As a trader we need to find our edge in our trading strategy also clearly define the time frame you want to trade and analyze.What kind of Risk to Reward Ratio you are looking for.
Few Points which we focus on in our trading
- Pick and choose your trade entries carefully based on your trading strategy aviod over-trading, at any cost. You need to first obviously know exactly what you’re looking for in the market (what your trading strategy is) and then commit to only trading when that strategy is presenting you with a signal.
- You cannot hesitate once you identify your trading strategy is giving you a signal to trade. Hesitation and fear have no place in a successful trader’s mind. Always prepare yourself for worst ie. SL will get triggered it will keep you at ease.
- Always believe on concept of Less is More. We firmly believe in this Trade Less trade Better Realize that it’s better to trade less frequently but with a bigger lot size when you do trade, rather than entering many smaller trades per month.
In next article we will discuss about Mind and Money.