OK, you’ve been trading for a while. You’ve made money, and lost money, and made money again, but something is missing from your routine. You don’t know what it is exactly, but you can sense it. Essentially, it is a feeling that you are close to unlocking the “Holy Grail” of trading...very close...but you are still just shy of it, and it feels like an ever elusive goal. Well, you are not alone.
There comes a point in the life of every trader whom has managed to stay in the game, when he or she realizes that they can do it successfully. They know they can make money and maybe even do it for a living, but they are not quite at that level. They know that if they can just make it over this one hurdle, then they are set for life with a skill set that can make them money as long as they breathe air. Here are a few ideas for moving forward:
it’s the little things. Often, traders are held back by something small and trivial. It’s often hard to see and many traders whom are not that self aware, or have egos that prevent them from acknowledging their own errors, mistakes and shortcomings, may need to get an objective third party to evaluate their trades and their trading. Hiring a coach to give you that extra edge and reduce the errors, is the way to go. Just remember that EVERY professional athlete in the world has mentors, coaches, trainers, managers, advisors, etc. This does not mean you need an entourage of people behind you, but the way to take trading to the next level is to seek out traders whom are better than you at the game. At the very least, this will increase your knowledge and may open up new doors.
Be the tortoise AND the hare. Talking about the slow moving turtle like creature, not the adjective tortuous which Webster defines as, “full of twists and turns, excessively lengthy and complex,” though that would be an apt description of the road most traders takes towards success. In the real world, traders need to be both tortoise and hare (or roadrunner as in the children’s cartoon), or at least have some of the characteristics of both. Ideally, it would be fast to learn, slow, methodical and deliberate to execute.
A LONG TERM realistic money goal. The most critical aspect of trading, and the one that many traders overlook. Instead, they focus on the short term goals-daily, weekly, monthly, and not about where they should be in a year or five years down the road. Having a longer term goal also helps keeps trader focused on the prize, not the day to day ups and downs. Goal setting goes hand in hand with trade planning and strategy design. All need to be realistic, matched with one’s resources, and not “pie in the sky,” fantasies of where the markets, or you, will be in six months. The better plans are invariably, long term...2 to 5 years down the road, and include breathing space for bad periods. By setting goals, traders can then work on the plan to get there, though both are best worked on together. Using one of those online trade explorers available on several trading forums, is a good way to analyze and track both goals and strategy, as long as traders refrain from boxing themselves in with rigid short term goals. Patience is the key ingredient in trading successfully, and the one thing that many traders lack.
Wash, rinse, repeat, but with a twist. If you are doing well, don’t change the formula. Just tweak it a bit. Try some variation on an indicator or a different trading period. A good friend and trader I know, switched to trading Asian and the beginning of London markets exclusively and stopped trading the New York session entirely. He had made money almost every Asian and/or London trading session, only to lose it and more trading the New York session. Duh! Well, eliminating New York might have eliminated some trading opportunities, but his portfolio is in the black and growing.
Educate thyself. Trading can be a very isolating profession. Retail traders tend to trade alone and beyond networking on social media, rarely venture forth to meet other traders or attend educational seminars. Frankly, most of them are a waste of time and money, designed to sell you some system (don’t forget to bring your credit card so you can buy the books and CDs), or the expertise of someone whom may have had a good streak trading, and decided the real money was selling the system, not trading it. On the other hand, there are some educational seminars and trade shows that are worth attending that will increase your knowledge and your profits over the long term. Moreover, you might even be able to deduct the cost of these seminars as business expenses and reduce your tax liability. Check with your accountant.
Develop your own high speed trading software. Automated trading is the way the market is moving. It doesn’t mean that manual traders won’t be able to make money. It just means that the share of trades done from machines programmed by mathematical algorithms will increase. The best way to get in the game, is to apply your knowledge and convert it to automated trading. There is software on the market that allows traders to do just that. You don’t have to be a computer programmer or software engineer to use it, and one of the best features of these programs, is that they help you develop better manual trading strategies through their back testing and application of technical indicators.
Listen to the market gurus, but be a skeptic. Watch the business news channels long enough, and you will realize that the so called “experts,” and even some of the top market makers, know about the same or less than you do. Indeed, they make huge mistakes and bad calls all the time. Witness hedge fund god John Paulson. His large bets on gold over the last several years have not done well. Of course, the big guys can afford to make mistakes as they sit on big piles of money, but the point is, you are not going to be able to trade like a Soros or a Buffett. You have to trade like yourself, with the knowledge that you can make money IF you stay alert for fundamental shifts, and adjust yourself accordingly.
Learn some new “tricks.” Many traders will stick with what they know until it starts losing money for them. The cutting edge types however, are always looking for the new and the alternative. These types of traders will invariably look at the options market for some variation, particularly if they have developed very good forex analytical skills. Binary options as well as futures, are one way for traders to maximize their skill sets and to take trading to the next logical level.