1. Ask yourself do you really want to take trading as a profession or You want to do trading as its the easiest way to make money ?
Before you can develop persistence and eventually achieve success in the tough trading game, you need to first identify if this is truly what you want to do. If you are only doing this for the money then the odds of you making it through the learning process is very slim. You have to be ‘foolish’ enough through your initial losses to believe that you can rise to the top 10% of profitable traders. Most traders learning curves are measured in years not weeks so trading is more like getting a degree than reading a book over the weekend.
2. Determine your motivation. Why do you want to be a trader?
Motivation comes from a deep reason why we want to achieve or have something. If you know why you’re doing what you’re doing, it gives you more energy to keep moving forward in learning and getting experience. If you are trading to make a quick buck, then you do not make that buck quickly you will join the quitters. If you are trading to have enough money to pay off your house in 5 years that will create the energy to drive you forward against the odds.
You can get through this first learning stage by writing down specifically all the things you want to have or accomplish through your trading. List all your desires and wants, all the rewards that will come through you not quitting the trading game. This is what will get you through if your heart is in it. You need a very big bucket of carrots waiting for you on the other side of trading success to get through the whips the market will hit you with while you are learning.
3. Outline Your Definite Action Step
Identifying your wants or desires speaks of what you want to achieve. Determining your motivation shows the reasons why you want to achieve what you want. Outlining your definite action step is necessary to know how you will be able to achieve what you want.
When you know how to get what you want, it makes it easier to achieve it. To know how, it pays to do some research and planning of what needs to be done on your part. Be specific on each step you need to take. Identify at least two ways and plans on how you can achieve your goals.
4. Keep the right mindset, believe that you are going to be a winning trader.
The road to trading success is not an easy one, in fact, it can be painful emotionally, mentally, and financially, if you do not know what you are doing, this is why only 10% succeed. There will be countless times you will face losing trades and failures that if you are not committed to success in the long term, you’ll succumb to negative thoughts of failure and defeat and just quit.
In order to develop persistence and eventually succeed in your trading, always maintain a belief in yourself and your eventual success, regardless of your current account situation. Keep your thoughts focused on doing the homework needed to take you towards your goals. Avoid negative thoughts and feelings for it will ruin your concentration and persistence. Focus on where you are going and believe that only time stands between you and your trading goals. The power of this belief will surprise you.
5. Build your trading support group
Your trading support group should be composed of successful traders and serious students of the markets who can help you succeed in your trading goals. Choose carefully who you will trust as part of your trading group. Listen only to those who have succeeded in what you are trying to do and who have positive mental attitudes who are willing to share. You can’t afford wasting your time listening to traders who do not have proven trading success and are not helping you learn and make money. Only listen to traders that are leading you down the road to trading success. How do you know they are doing this? Your losses are getting smaller and your wins are getting bigger.
6. Develop great discipline & habits
All your goal-setting and planning will go to waste if you aren’t able to develop discipline in following your trading plan and good habits in your daily trading routine.
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GREAT ENERGETIC FANTASTIC ARTICLE SPEAKING OUR CONSCIENCE
THANKS BRAMESHJI
Monday like events happens one in 3 years you will get enough alert if you have enough experience.
Excellent Article Sir. To succeed in trading we need great discipline, emotionally balanced and continuous learning . Thank you.
Bramesh Ji please comment whether one should always have hedged position while trading futures keeping in view the Black Swan events like monday.
THanks All !! Hedging depends on your risk profile.
Rgds,
Bramesh
Then u reverse your position at right level. And if you are taking options then you should be willing to lose at least half of it. Naked option buying can only be done if you are willing to lose all of it else never buy options.if ur options can give you 100%return in a day then it can very well take that 100% return as well.
thnks,bramesh but wat to do in case of monday like situation.Suppose i hv a stoploss of 20percent in my option trades,what to i do then as market opened huge gap down?
well said