Trading is an endeavor people become attracted to largely because they believe it offers a way to make money fast. However, as any experienced trader will tell you, the reality is quite different. The disconnect between what is possible through trading and what (and how long) it takes to actually achieve it, is typically quite significant.
This lesson is about fast-tracking your trading SUCCESS, not necessarily about how you can make fast-money as a trader. These are two different things and it’s important you understand the difference between them if you want to not just survive, but thrive as a trader.
What does “trading success” really mean?
The first step towards speeding up your trading success is making sure you understand what defines trading success. At first thought, beginning traders think “success” is equivalent to money, and lots of it, fast. However, I am challenging you to change your conception of trading success, which will help you change how you think about the market and as a result, will change your trading approach to a more sustainable and successful one.
Now, if you want to manage your risk properly on every trade you take (which you must do if you want to succeed long-term), you’re going to have to accept that you cannot risk a large portion of your trading money on any one trade. What does this mean for the average retail trader with a relatively small trading account of say $5,000 or less? It means that you simply are not going to make a lot of money on any given trade, and it is going to take you a decent chunk of time to build up your trading account even IF you’re doing everything right.
Next, as I teach in my trading course and in many of my articles, there simply is not a high amount of high-probability / high-quality price action trading signals in any given week or month. What this means is, if you want to trade properly, you are not going to be trading a lot. At first glimpse this might seem to be another thing that ‘slows down’ your trading success, but as I will discuss next, that notion is simply the result of faulty thinking about what trading success is.
Trading success is:
- Taking the time to learn an effective trading strategy, including entry and exit criteria, money and risk management as well as trading psychology.
- Next, put all that knowledge together into a cohesive unit that makes sense to you and provides you with a trading approach and ‘plan of attack’ for your interactions with the market.
- Now, THE MOST IMPORTANT FACTOR IN TRADING SUCCESS – DISCIPLINE. You must be disciplined and consistent and stick with your trading approach in all areas – entries, exits, risk management and psychology.
- Build a trading plan to help you stay disciplined and provide you with a tangible ‘road map’ to keep you grounded and accountable.
If you can put in the time to do the above things and stick to them, you will already be far more successful than the vast majority of traders.
Remember, if you have a small account, you aren’t going to make a lot of money fast if you are doing everything right. However, a trader who consistently makes money on a small account, even if its $100 a month, is light-years ahead of a trader with a $100,000 account who is losing money each month. If you develop a 6-month + trading track record showing consistent results and profits on even a $1,000 account, THAT IS TRADING SUCCESS, even if you only made $500. The point is, the dollar amount you make does not necessarily equate to trading success. Trading success is measured by assessing many different metrics besides just money. A successful trader will be profitable over a year or more, and he or she will have done it with consistent actions, not impulsivity with huge draw-downs in between gains.
The fast way to achieve trading success may seem like the slowest, at first
Because people often want to make money fast in the market as we discussed above, they tend to follow their first feelings on how to do that, and those feelings almost always lead to over-trading and risking too much per trade. These things, as you may already know, lead only to losing money in the long-run, so whilst you may get lucky and make some fast money by being greedy (over-trading / over-risking), ultimately you will lose that money if you continue with those improper trading habits.
Thus, the fastest way to make money is by being strategic, logical, objective and patient, which will probably seem like the ‘slowest’ way to make money at first. But, and perhaps you may think unfortunately, there is no other way to consistently make money over the long-term than to learn how to trade properly and to then ACTUALLY trade properly. So, the sooner you start learning proper trading habits and strategies and carrying them out with consistent discipline, the sooner you will start making money.
As your account grows through proper trading habits, you can trade larger and larger position sizes to the point of eventually being able to make a lot of money from even one trade per month. This needs to be your overall goal with trading, for it’s truly the only way a smaller retail trader (like you) stands a chance at making consistent money and then eventually life-changing amounts of money in the market.
Let your trades play out
It’s very tempting to close a trade out as soon as it goes into profit a little bit for you, especially if you’ve recently endured a few consecutive losses. But, often, closing a trade out for a small profit, before it hits your profit target, is the wrong thing to do and will make it much harder for you to make money over the long-run.
One of the biggest turning points in my trading career was when I realized that to succeed, I simply needed to be less involved with my trades than I was up to that point. My biggest wins and best trades have always been the ones I didn’t micro-manage, the ones that I let go until they reached my predefined profit target and didn’t sit staring at all night.
Trading can be as hard or as easy as you make it, and generally the more involved you become with your trades (watching them, adjusting them etc.), the harder it is to make money. The market is going to move, but you do not know when or by how much / how far, so if you are sticking to your trading strategy, it’s silly to sit there worrying about and watching your trades, because that is not going to help anything, at all. This is the main theory behind my set and forget trading approach and time and time again it has proven its effectiveness to me over the years.
I would even go so far as to say that you could perform an ‘experiment’ of sorts, wherein each time you enter a new trade (and after setting stop loss, position size, exit level), you do not look at, mess with or even think about that trade for 7 full days. If you use my price action strategies with this ‘experimental’ trade management approach, I’m willing to bet you would do quite well over the course of a year.
Don’t confuse ‘under-involvement’ with under-performance
Whilst it may FEEL like you are not ‘doing’ a lot of things with your trading if you are following everything I discussed above, you must not let this feeling be confused with a lack of progress in your trading. This is perhaps the most difficult part of trading; that our feelings and emotions are typically at odds with what we need to do to make money in the market. You need to remember that low involvement with your trades does not necessarily equate to slower progress in building your trading account, in fact it’s usually the opposite.
We are our biggest obstacle to making money as fast as possible in the market; no matter how you slice it, trading failure always comes down to human errors born out of emotions like greed, fear and revenge. The more you think about that and devise ways to circumvent it, the faster you will build your trading account the RIGHT way and eventually achieve long-term success in the market.
This lesson has given you a small glimpse into my teachings and my views on trading and trading success. Without trying to sound like I am trying to sell you something, if you want to truly fast-track your trading success, you need to learn more from me, an experienced trader with more than 15 years in the markets. Learning from others, from mentors with the skills you are looking to develop, is the fastest way to learn anything. In my trading course and members area I give you all of my knowledge and trading strategies, built from years of real-world trading experience. This is an invaluable tool that is probably the single biggest thing you can use to speed up your trading success.
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