This is the first of a series of three articles I am writing to help you with some tips on creating a successful trading system and/or winning trading models. The articles will start off with general suggestions and will increasingly become more specific. In this piece I would first like to discuss the emotional and personal qualities you will need. These are in no particular order, but all are necessary to succeed; optimism, patience, knowing who you are, perseverance, hard work, and discipline.
Let’s begin with optimism. I may not be the first to tell you this, but if you have not heard it before, then here it is…MOST TRADERS FAIL. This is true and you really need to understand that the odds are stacked against you. This does not mean that you should not try, or that trading is impossible, but it helps to know this ahead of time. Why? Because you need to understand upfront that trading for a living is a very, very difficult thing to do. Being optimistic will help you when times get tough.
The second quality is to have patience. Many people falsely assume that they can trade and wind up blowing up their accounts in a short amount of time. Do not assume that success will come quickly. It will take time to build a successful trading system. Some traders may do it quicker than others, nonetheless, go at your own pace and learn to think in terms that it may take a few years, rather than days, weeks, or months. All good things in all good time.
Third, because trading is such a difficult thing to do, you will need to know who you are and what your personality is like BEFORE starting to build your trading models. I have written other articles on this, but I will touch on this briefly. Understanding what type of personality you have will help you design trading models and systems that suit your temperament and personality. For example, some people want a lot of action; they should trade models that trade frequently. Other traders may be mellower; they should create models that do not trade as frequently. In addition, how patient are you? Can you hold a position for more than a few minutes? Can you hold it for days? This too is part of the process of building a successful trading system. The point is to seriously analyze who you are and what you are like first, and then start to build your trading models and systems with this knowledge in mind.
Most traders believe they will be able to create a trading model and start making money right away. I am not sure why most traders make this false assumption. Being a successful trader is no different than being a successful surgeon, or succeeding in any other profession. It takes many years of hard work and perseverance to be successful in any profession; why would it be any different with being a successful trader?
The last quality that a trader needs is to be disciplined. If you build your trading models and systems with a disciplined attitude, and trade with discipline, you will slowly, but surely, increase your chances of succeeding.
No comments:
Post a Comment