How to Fail As a Trader (change strategies)
It's not Tuesday or Thursday but we decided to shoot out a special little blog post on the reason of why so many traders fail around the world.
In this post we talk about How to Fail as a Trader, and the point we focus on is hopping from one strategy to another, basically not being consistent with just one... basic approach while working on the most important factor in your trading, which is you (your skills, experience, knowledge and so on)
A honorable mention goes to PeterR, a member and now moderator of our community, no matter how hard it got for him... he believed in the approach and stuck with it, and continues to follow it as a religion pretty much. Congrats Peter and thank you!
Now lets dive in to the post, and to explain the upcoming post best lets quote Bruce Lee because no quote explains this subject better than the below quote,
“I fear not the man who has practiced 10,000 kicks once, but I fear the man who has practiced one kick 10,000 times.”
In this example, sticking to one strategy, even if its not a supreme 99% win strategy, is literally the way to create profitability and how you should approach your trading (practice one kick many many times).
On the contrary side you can choose to be the trader who strategy hops and try every "kick out there", and master none. - The choice is... yours.
The guaranteed way to ensure that you remain a losing trader is to never develop any mastery (of one approach) and keep switching from strategy to strategy.
I'll give you one better way to think about it, by not focusing on one approach and mastering it, you will simply lack the hours necessary to have anything but suboptimal trade execution, poor overall market sense, and a general lack of understanding of the markets.
It's going to be nearly impossible for you to be profitable if you don't focus on just "one type of kick" and focus on it for thousands and thousands of times!
The more important principles of study for you are skills and not strategy, a strategy should be simple but it must be backed by skills, practice, which comes from time invested i.e. experience, and consistency. The rest is all skill... and since we are talking about skill, below are 4 key areas to put your focus on and become a better trader, because that's what your goal should be, being a better trader! The goal is on YOU not the trading strategy or system.
1. Price action patterns
At first glance price chart is complete chaos, but when you focus on the basics of price action, which is BASIC HIGHS AND LOWS the clarity comes and you start seeing and feeling the market better.
If you don't focus on price action, the language of the markets, then the market will look irrational and it will feel like there is no way to read it.
Price action patterns are the language of the market and with them, the price fluctuations start to make sense.
Invest time to learn basic price action movement and patterns.
Press here to learn more about price action. Thank me later!
Key levels are the strongest supports and resistances, but you don't need to map them all... for day trading you need just a few of them and within our blog you can find many videos and posts on which levels we focus on.
Click here to learn more about key levels.
Losses are inevitable in trading... yet they are part of the game and we can do nothing about that. The only thing that we can do, is to control how much we lose and the way to do that is to use position sizing, we have an excel for this in our community, join us and get it!
4. Psychology / Mindset
Trading is a mental sport, and the best way to work on your mindset is to read and read a lot! Starting from personal development books and all the way to trading psychology books! Thats where you ought to invest your money, books and lots of them!
See you in the next one!