There are Eight important things each trader has to accept if you are truly serious about becoming a trader.
- You’ll have to accept that over the long run, only about 60% of your trades will be profitable. With some strategies, it will be much less.
- Accept that having big wins and small losses, rather than big bets paying off, is the key to being a successful trader. After a sequence of losses, big bets can quickly put you out of the game.
- Accept that the best traders are also the best risk managers. Even the best traders don’t have crystal balls, so they ALWAYS manage their risk capital on every trade.
- If you want to improve as a trader, you must accept that trading small and taking smaller risks is the key to your success. The first step to becoming successful trading is to risk 1% to 2% of your capital on each trade. Limit your losses with stops and position sizing, and exit when your losses reach these levels.
- You must accept that 10 trading losses in a row will occur a few times per year. The question is how your account will appear once they occur.
- You must accept that you will make numerous mistakes. You’ll be better off if you admit you’re wrong and change your mind sooner rather than later.
- If you truly want to be a trader, you must accept the fact that it is not easy money to be a trader. It is a profession like any other, requiring a great deal of time, effort, and even years to master. Expect to work for free and pay the market’s tuition in the form of losses until you can consistently and profitably trade.
- Math, ego control, risk management, psychology, focus, perseverance, passion, and dedication are all important aspects of trading. You might not make it if you’re missing one. Friends, trade wisely.