EACH TRADER, ONE SYSTEM
This is a process of evolution in the task to becoming a good trader; to finding the system that makes sense for you.
There is not one system better than another, there are a lot of systems that try to take advantage of the different opportunities that arise in the market, but none is better than the other, each tries to find "their advantage" in the game.
IN TRADING, THE DETAILS MATTER
Like in any relationship you should pay more attention to your partner. In the details, you find the difference, these details you must also put into trading.
To be exceptional, you must prevent errors, and moreover, try to establish methods that help you identify errors.
Some traders have a list of the situations that must be given to enter a trade, and before they get in, they review them. That is a way of identifying what a priori looks wonderful but really is not as good as it should be.
BE A HEALTHY TRADER
Take care of your body and mind.
Many experienced traders, before starting a trading session do a self-examination.
How am I? I'm sick? Have not I slept enough? Have I partied last night? Am I stressed?
Imagine that the market has closed, you think the operation you've been chasing a while is at the ideal time, but look your where today you have the flu and a fever of 40 degrees.
Do you think that you should make a decision that could be worth a few hundred euros? Maybe because of the fever, instead of putting a purchase order, you put it on sale, or instead of the stop at 4.30 you put it at 3.40 ... You understand?
To become a good trader, all the details count, and you are the most important equation in a trading system.
We just talked about physical health, but what if you're depressed? Or euphoric? Either way, the results can be equally disastrous. Depression can lead you to make bad decisions because you see everything black, even when the indexes give rise symptoms, you will continue to bet on red.
Euphoria is as bad as depression. After a good run of winning trades, there are traders who stop trading, precisely to avoid overtrading, making bad decisions due to a good winning streak.
HAVE THE PATIENCE TO CONTEMPLATE YOUR RESULT
This advice to becoming a good trader links directly to the idea of large numbers, and we will mention the system that the “clan of the Pelayo” used to win in casinos.
They knew that all the roulettes had a slight inclination on their axis, something logical with the passage of time and the continuous spin.
First, they studied the roulette, took their notes and checked the most likely numbers and acted accordingly.
All they had to do was bet and wait for the odds and big numbers to get on their side.
This usually happens with trading systems. There are times when you are going through losing streaks, because markets change and have less or more volatility, and therefore your system gives more false signals and causes more losses.
We must trust that our system works and that in the long run, we will be able to win, that our gratification will come, that the big numbers, those the casinos use to know that they win, are on our side.
LOSSES ARE PART OF THE TRADING GAME
When you understand that losses are part of the game, you will accept the losses as part of your trading business, and when they occur they will not cause you any pain, you will have no problem accepting them ... as long as you have a system.
CONTINUOUSLY IMPROVE AS A TRADER
As teachers or doctors, and many other professionals, need to have courses to recycle and improve, traders have also an obligation to continuously improve
To improve continuously we have to create our own trading diary.
The diary will be our best ally to know where we are making mistakes, where our strengths are, we can even draw conclusions to modify our trading system, create other alternatives that can give us further advantages in the market.
Of course, there are other options to improve as trader such as using demo accounts, joining our Trading Webinars, or socializing with other traders.
You have to be humble when you lose and recognize that you were wrong, you have to be humble to not boast about your successes, you have to be humble so that the losses do not sink you, nor the gains make you think you are GOD. But above all, you have to be humble to understand that what we know about trading is never going to be over. Every trade is a new challenge.
If you are passionate about trading, if you like to invest in the market and are willing to suffer, this path is exciting, because, on the way to becoming a good trader, you will also become a better person.
MAKING THE RIGHT DECISIONS IN TRADING
Trading on a chart (technical analysis) will always provide us an unknown result. We do not know if the approach we are doing will be fulfilled or not. So that’s why when we make the right decisions, either to do day trading or simply to buy stocks thinking long term, there is always risk and some stress, similar to a leap into the void.
There is a formula so that you can remove the traumatic part and act calmly when you face the market… follow a plan. In this way, everything is calculated, and the feeling of stress will be minimized because you will be sure you made the right decisions, even if the trade does not go well.
THE BEGINNING OF THE TREE, IT’S ROOTS
The first thing you must do is decide what you want. This is something very important. Markets are a tough place to be if you do not know why you're playing them. Do you know why?
You can enter, leave, or maintain a position, but your mind will not leave you alone. If you are in profit, it will tell you that you are leaving money on the table. If you are losing, it tells you to stay even though there are many reasons to just cut your losses.
Once you've decided that you want to do Scalping, Day Trading, Swing Trading, go short, medium, long, against the trend, etc., it's time to start looking for the instruments where to invest.
DEFINE THE TREND AND SEARCH IN SECTORS
Even if your premise is wrong, you must have an idea of what is happening in the market.If your time periods are too long, this will not influence you too much, because you should only be clear about the background trend, but if you do Swing Trading, you have to decide every week what you are going to be; buyer, seller or stay on the sidelines.
Once you are clear about what the trend is or what you think is the dominant trend, you will be looking for the sectors that best fit your vision. If you want to go long, you will look for strong sectors and if you want to go short, you will look for weak sectors or those with poor technical aspects.
Once the search for the sectors is finished, you have to look for the assets that make up those sectors, so that you can finally have a few candidates, which can be reduced to one or two.
The swing trader must do a search for the news that could move the value, such as the presentation of results, meetings of shareholders, distributions of dividends, etc. All this information is interesting and should be taken into consideration when you trade.
APPLY YOUR TRADING SYSTEM
We should check our trading journal, you see your evolution and analyze your results. Whether you are progressing, and whether your capital is growing or not, and why.
The trading Journal, along with all the decisions we make, is the decision tree, as its structure is hierarchical we will tend to make fewer errors, and our evolution will be more positive.
A big advantage that all the small investors have, compared to the “big sharks”, we can decide to do nothing, we can wait and look for the best opportunity, many times they do not have that advantage, they have to be in the market all the time. Patience is a great virtue.