1. The most important thing is to learn how to learn. Study past winners from different time frames and reverse engineer. Keep a journal, set goals, and work deliberately towards achieving them, one step a time. Improve yourself every week.
2. Less is more. First, learn everything about one great setup – how to find it, when to trade it, how to trade it, when not to trade it. Become a master in trading that setup. Understand that this one setup is not going to work in every market environment, so there will be a time when you will have to stay on the sidelines and do nothing. As you get better at trading your one setup, gradually start adding more setups to your arsenal until you have the right tool for any market environment.
3. Find a mentor who can accelerate your learning curve. There are two ways to learn – from your own mistakes and successes and from other people’s mistakes and successes. You can learn a lot by studying your past trades and reading practical and thought-provoking books and blogs. In most cases, those efforts are not enough. Most people need the help of an outside mentor on their journey to profitable trading.
There has never been a better time in financial history to find a good mentor. There are many tools that could help accelerate your learning and building of trading skills. Some of them are free sources like StockTwits, Twitter, Sparkfin, and various trading blogs. There are also many amazing paid trading services. Find one or two or three that best meet your personality and desired trading style. Try different services that can help you learn new skills and offer you new and insightful market perspectives.
Be honest with yourself. It takes a lot of time and efforts to properly prepare for the trading day/week. If you have a full-time job outside of trading, time is an extremely valuable resource. Becoming a fully independent trader and idea generation machine can be your ultimate goal, but to get there faster you can use the help of an outside mentor – someone who can share good trading ideas, teach you how to approach financial markets and manage risk.
As Christian Siva-Jothy says in “Inside the House of Money” – “ No one gets paid for originality. You get paid for making money. I am happy to take other people’s good ideas and run with them, as long as I understand why I am in a trade.”
4. Take the occasional mental breaks from trading. Trading could be very emotionally draining. Find a balance between work and life. Have a hobby outside of trading to occupy your mind. Trading can be a joyful and a profitable experience. If it is not, you are doing it wrong and you need to look for some help.
5. Take care of your health – physical, mental, and emotional. Your trading results depend on your overall well-being. Eat healthy, move a lot, sleep as much as you need to, practice empathy, travel to new destinations to nourish your creativity. Regular 2-minute meditation per day may help to improve your focus and alleviate your anxiety. Do you know what is three times better than meditation for reducing stress? – laughing. Watching some stand-up comedy every day can boost your immune system and make you a sharper thinker.
Check out my new book: Top 10 Trading Setups – How to find them, when to trade them, how to make money with them.