By sharing the following ideas from our own experiences as traders we hope that you all may find some value in them.
In some ways time is your ally when you are a new trader. As a trader there is an education in every market you see and in every practice trade you make. Trade by trade, market by market, as a trader you gain experience, develop intuition, and build up skills.
In other ways time is the enemy. Learning to trade takes time, it will not happen overnight. The amount of time you will spend is unknown and varies for each individual. While learning to trade you will encounter frustration and disappointment along the way, it’s part of the learning process. Expecting setbacks and having a plan in place to deal with those setbacks will make failures more manageable and give you the learning process for success.
Here are a few strategies to help anyone who’s learning to trade:
1) Take financial pressure off your trading as much as possible. Trade on a demo or simulated account until you are consistently profitable before you trade on any live account. Unlike other jobs where you go to work every day and receive a paycheck, trading is a career where it’s possible to go to work and lose money— lots of money. On the other hand, it is a profession which allows the trader to bring home unlimited amounts of money each and every day. Trading on the demo or simulator is a great way to make mistakes without having to pay for them.
2) Don’t rely on trading to pay your bills at first. Do not place a specific timeline or certain date in the future when you expect to be profitable. Let your trading profitability take care of itself. The market doesn’t care about you, your time table or your bills. Try to keep your expectations flexible. As your trading skills develop the money will follow.
3) Control your costs. It’s easy to spend lots of money learning to trade not to mention the time spent learning. Costs can add up and increase the time pressure and economic pressure you feel, so try and be selective about the trading resources you spend money on. Keeping your costs down allows you to stay in the game longer. Having another job or source of income can drastically reduce the pressure to pay bills while learning to trade. If you have the resources to do so you are already ahead of many others who do not have this luxury.
4) Look for ways to stay in the game. The failure rate for traders is high, but here’s good news: you have complete control over whether you fail or not. As long as you decide you will not fail then you are still on the path to success and making progress every day. If you only have limited time in your schedule to trade make the most of it and don’t be discouraged because you don’t have more time.
5) Focus on process goals. Your progress may not be reflected in your profit and loss results for awhile, but you can take pride in your process goals from the first day. Give yourself a daily loss limit and challenge yourself to stop trading before you hit it. As you build skills try new challenges: try to trade for scratch consistently each day, then try to make $100 a day consistently and so on. Understand that a scratch trader is a skilled trader. Looking back over a month of trading can help you realize how far you have come. You will be surprised by the progress you have made.
6) Give yourself a break. We all make mistakes and there are no permanent victories. The good news is there is always new opportunity tomorrow if today was a bad day. If you are feeling especially discouraged make a gratitude list. Write down 10 things you are grateful for in your life. It can be as simple as “I’m glad I didn’t get in a car wreck today.” Making a gratitude list can help you keep your trading frustrations in perspective.
7) Utilize positive self-talk. Believe there are an unknown number of markets you need to see and practice trades you need to make before you will accumulate the skills you need to be consistently profitable. With each trade and each market the goal comes closer as the unknown number shrinks.
8) Keep your business to yourself. It’s unlikely your friends and family will understand the unique trading challenge, so don’t expect them to. If friends or family ask how you’re your trading is coming along it’s a good idea to have a generalized response ready, like “I am in a training program and it’s going great!”
9) Find a trading accountability partner. This is easy to do, fun, and it will give you the psychological support you will need. Ask a fellow trader what he trades and the conversation is started. Sharing the journey with a peer is more important than it might sound. Each person is a sounding board for the other, an outlet to vent frustrations to, a person to analyze performance with, and someone to be accountable to. Most important, each person picks the other up when disappointments and frustrations are at their worst. This strategy cannot be stressed enough.
10) Have fun. There will always be more work to do, more research, another test. It’s impossible to learn everything and to trade flawlessly while never suffering a losing day or a losing trade. So allow trading to be fun and try to strike a good balance between the work side of your trading and the fun side.
You will need a good balance between your trading and other activities in your life, such as family, outdoor activities, reading, or whatever activities you do for relaxation.