Become a TOP TRADER in 2022 with these tips!
2022 is well underway and already many traders are feeling the pressure of their trading accounts...
In this blog post we want to bring your attention to 3 crucial things you can do to make 2022 the year your trading improves and you become the best trader you could be!
We're going to follow 3 quotes from successful investors and traders to build our education within this post (and video below) after all the best way to succeed in any business is to follow the examples of other successful people already doing what you want to do!
Lets get going with Jesse Livermore, who was an American stock trader. He is considered a pioneer of day trading and was the basis for the main character of Reminiscences of a Stock Operator, a best-selling book by Edwin Lefèvre.
“The game taught me the game. And it didn’t spare me the rod while teaching." – Jesse Livermore
The best way to learn or improve your day trading game is to play it. You can spend all the time in the world reading books, watching courses, trading a demo account... but nothing will show you what you are lacking as a trader like trading live. When you trade a live account you very quickly understand that there is so much for you to learn, but at the same time you get to meet your weaknesses, thing things that if you work on, could make you a top day trader!
PRO TIP: First learn as much as possible, go to babypips.com and start the school if your knowledge is low, but if your knowledge is sufficient in both the markets and the platform you might be using, then the best thing to do is the following:
List down all of your weaknesses, the things that are holding you back from success, such as over trading, poor entries, early exists (not letting your winners run) and the other mental traits like lack of discipline and patience, not having discipline and patience is a major weakness and without these two mental skills you are sure to fail as a trader.
Spend more time preparing your charts than you are actually trading them, map up key levels, dot down the times of the news, review what might be driving specific assets up or down right now.
Work on your system, define all of the rules that you need, such as how do you enter? What is your risk management? What are your tactics? List it all down and starting building your masterpiece
Accept that it will take you time to success, but without hard work added to this time, nothing good will be created!
The next quote comes from Alexander Elder, who was a professional trader and a teacher of traders.
“The goal of a successful trader is to make the best trades. Money is secondary.”– Alexander Elder
Day trading is a fully mental sport which requires a lot of hard work for success, the skills it requires are focus, consistency and discipline. And to make the "best trades" only, requires consistency, focus and discipline.
But lets go back a bit, if you review your trading history you might find a few big winners there, our PRO TIP for this quote is that you review your biggest winners, and any other best trades taken, and build up a criteria of what you did there to achieve this success, now that you have what to look for, and all you have to now do is have the patience to wait for those great trades to show up!
Success comes from basic causes that create effects, I love explaining cause and effect in trading, and I'll end this quote with the following: Produce enough good causes and the effects will be positive. Good causes in day trading are, following the system, having patience to wait for the best trades, having discipline to execute your system with consistency and if you do all of that, the effects will be PROFITS and money!
The final quote for this blog post comes from the one and only.. Mr. Warren Buffett.
“Risk comes from not knowing what you’re doing.” – Warren Buffett
At its finest form, risk management is what separates a trader from a gambler, if you do not have a complete risk management plan and apply in day in day out... you are doomed to burnt accounts in 2022! Here's the best advice we have on trading risk management, and it comes only in 2 basic points which you must follow with discipline and consistency:
Use position sizing
Always have a definite stop loss on every trade
The 2 point is simple, while the first point you might not understand so I will explain it in brief detail.
The way we use position sizing at PrimedTraders is a percentage basis of our account, the calculation is simple, we break down our account into lots, if our balance is 10,000 then we break that down into the first 2 digits, 10, then we used 10% of that 10, i.e. 1 lot positions, if our balance grows to 11,000 then 10% of that is 1.10 lots, while if it drops to 8,000 then our size is 0.80 lots. Simple right? Very, but without discipline and consistency it is useless!