Trading attracts many market newcomers because they believe it offers a way to make money fast by easily trading financial markets. The time it takes to trade successfully is what often catches beginner traders out who often rush into trades without having learnt the basics or “trading 101”.
This lesson is about how to trade successfully quickly, not necessarily about how you can make fast-money as a trader. Certainly it will give you a good foundation on which success in financial markets can follow. These are two different things and it’s important you understand the difference between them if you want to trade successfully.
The first step towards speeding up your successful trades is making sure you understand what this involves. Beginner traders often think “success” is equivalent to money, and lots of it, fast.
However, this article is about realising that to trade successfully takes time. With the proper approach you can make money by successfully trading through firstly being a consistent trader.
Now, if you want to manage your risk properly on every trade you take (which you must do if you want to succeed long-term), you’re going to have to accept that you cannot risk a large portion of your trading money on any one trade. Starting small, say with 1% of your portfolio is a good start.
As The Lazy Trader teaches in its trading course and articles, there is not a high amount of high-probability / high-quality price action trading signals in any given week or month. A Lazy trader should not be looking to trade a lot, but rather wait for the trading strategy to succeed and enjoy life in the meantime! Lazy Trading gives us an abundance of time, and this is the most valuable thing we will ever have! To get successfully trading, its useful to know what to learn:
If you can put in the time to do the above things and stick to them, you will already be far more successful than the vast majority of traders.
Remember, if you have a small account, you aren’t going to make a lot of money fast if you are doing everything right. However, a trader who consistently makes money on a small account, even if its $100 a month, is years ahead of a trader with a $100,000 account who is losing money each month. The point is, the amount you make does not necessarily equate to trade successfully. Successful trades are measured by making money consistently, rather than starting with a bang before losing it all. As a market newcomer, consistent, risk adjusted gains expressed as a percentage are far more important than monetary gain!
Getting rich quick is attractive but often leads to letting one’s feelings getting the better of discipline and using a clear trading plan. In the long run, it’s easy to lose money fast if you rush into emotionally driven trades! The fastest way to successfully trade is by being strategic, logical, objective and patient! The sooner you start learning disciplined trading habits and strategies the faster you will start to make money.
As you grow more proficient and successful, you can trade larger position sizes to being able to make a lot of money from one trade per month.
It’s very tempting to close a trade out as soon as it goes into little bit of profit, but closing a trade out for a small profit, can often mean leaving money on the table!
Being be less involved with trades, i.e. not watching them and adjusting them every minute of every day leads to trade successfully. Suffice to say, if you are a surfer who is riding a wave, it makes sense to ride it towards the end rather than jumping off prematurely.
This is the main theory behind the Lazy Trader’s set and forget trading approach and has proven its effectiveness over many years. Not looking at a trade for 7 days is worth trying and will teach you the discipline of not micro managing your trades, ensuring you trade successfully. Remember, it is a valid trading decision to stay out of the market if there are no valid trading set-ups!
While you may feel guilty not checking your trades regularly, understanding that our feelings and emotions are typically at odds with what is required to trade successfully. You need to remember that low involvement with your trades does not necessarily equate to few successful trades.
The biggest obstacle to making money is allowing your emotions to take hold as this leads to make irrational heat of the moment trading decisions. The more you can follow a disciplined approach, the more successful you will be.
This lesson has given you a small glimpse into how the Lazy Trader can help you trade successfully sooner! To trade successfully means learning the key basics such as having a disciplined trading plan and patience . You will also learn to control your emotions by avoiding defeating yourself through entering emotionally driven trades.
One of the hardest aspects of trading is letting your strategy play out. Learning to ‘switch off’ and to stop your temptations to make small adjustments and ticker with a trade will ensure you don’t veer off from your original trading plan. What may seem to be under-involvement in a trade leads to a final important point we have covered: Knowing when to avoid unattractive markets!
Conserving your capital is a skill an aspiring trader should develop over time, which can easily be done by trying to force a trade which isn’t there! With all this first class knowledge, what are you waiting for to see how to trade successfully can change your life?