Trading success is like traveling on a journey. You must know where you are now, know where you want to go and follow a planned course to that place from where you are. Yet few people follow these simple rules when they are trying to succeed at making money through trading.
Be clear where you want to go
It is proven that people who have clear written goals have a higher chance of achieving them, compared to people who do not have clear goals. My experience in consulting with individual traders is that few of them would come to me with a written goal and plan for achieving them. Yet precisely written goals are a key to success. Consequently, the first 2 steps to excellence involve goal setting.
- Develop your goals with dates for the next 5 years, 1 year, 6 months and one month.
- Make sure your goals are well formed. Ensure they are positive and specific. Pick process-oriented goals rather than results oriented goals as this will ensure continuous self-improvement, no matter how successful you get
- Make sure you know when you have achieved your goals by having evidence that confirms the same – this can be strategies learned, discipline in following processes, milestones achieved. money earned, etc
- Ensure your goals are desirable for you and everyone associated with it, else you will have trouble achieving it. For example, wanting to be a successful swing trader requires a lot of time for study that you would not have to put in if someone else was managing your money. The time commitment might upset your family and interfere with other aspects of your life that are important creating an immediate conflict in achieving that goal
Know where you are
Now that you know where you want to go, you need to assess where you are to decide the path to get to your goals. A few things to keep in mind are:
- Identify and focus on resources available that might help you achieve your goals – What do you have that can help you reach your goals; Who do you know who can help; What information can you obtain that might help; What else can you call upon to help you achieve your goals; What skills can you develop?
- Determine what can possibly stop you from getting what you want and how you will manage these obstacles – Do you have enough capital; what do you lack which will prevent your success; Are you able to make the time required. Know this, you can overcome known obstacles easier than the ones you do not know.
Plan your route and begin
Once you have completed the above, the secret to success is to begin. You must act and if you start by planning increase your chances of success. A few things to keep you on track are –
- Develop mastery by learning and practicing. Read books, take courses, and find a good mentor. Mastery does not come easily. It requires study and hard work. The more you put in, the better you will get. Focus and intensity are key to making substantial improvements
- Develop a specific plan for your trading which covers details like, how much capital will you utilize; how much will you risk per trade, in a day, in a month; position sizing methodology; trading setups; trade management plans; platform layouts; back up plans in case of eventualities and anything else which might be significant for your trading success
- Take the first step towards your goals no matter how small. Keep going. Consistency of the right action will take you ahead. Commit to it and then do it.
- Continually monitor your progress to ensure you do not become your greatest enemy in fouling up your plans
- Give gratitude for everything. Even a $10 profit you took at the end of the day, is better than no dollars. When you start being thankful for everything small that comes your way, you will start noticing a lot more of the small things coming your way and helping you move ahead. You will be surprised with your progress.
Every successful trader uses these techniques to some extent. Start using them and you will be on your way to becoming a successful trader.