If you want to become a successful trader, you need to set the right goals and identify the steps you need to take to achieve those goals.
Both components are important.
Setting the proper goals will put you in a mindset that will keep you focused and on track. If you set out to make one million dollars in a month by copying another trader, you have the wrong mindset, and your trades will reflect it. If you set out to learn and develop a skillset, you are on the right track.
Once you have the proper mindset, trading success can be achieved through continuous education and optimization. Below are 13 tips that can help you along your journey.
1. Stop Burning Cash While You Figure Things Out
Like any skillset, there is a learning curve associated with trading. Don’t expect to dive in and find success on day one. Take some time to learn.
During the learning phase, protecting your capital is your primary goal. Why waste capital on a trading strategy that hasn’t been proven yet?
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2. Strive for Self-Sufficiency
The best traders think for themselves. They learn from others but do not copy them.
The best traders are self-sufficient and the most promising new traders are striving for self-sufficiency.
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3. Develop a Process
What separates day trading from gambling?
Process and risk mitigation.
Your goal is to develop a process that allows you to consistently capitalize on high-probability trades.
This won’t happen by luck. You need to create, formalize, and refine you personal trading process.
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4. Don’t Get Blinded by Profits
Everyone wants to get rich, but only a few people actually do.
Striving for profits is not unique, nor is it a strong enough motivator.
The best traders are focused on developing a skillset and becoming the best traders they can be. They find enjoyment in the craft of trading itself (vs. solely in the profits that ensue).
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5. Accept That Trading is Not Easy
If you came to the market in search of easy money, turn back now.
While you may get lucky on a few trades, you will not make a trading career off of luck alone.
Trading is difficult and should be accepted as such. Accepting this reality equips you with the proper mindset to tackle the daily challenges trading will present.
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6. Don’t Try to Catch Every Trade
Thousands of stocks trade daily and hundreds of them present quality trading opportunities.
It is impossible (and unnecessary) to capitalize on every great trading opportunity.
Narrow your focus, choose your setups, and ignore the noise.
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7. Identify Your Strengths
Every trader has their own unique strengths. Some traders are great at short selling while others are great at buying breakouts.
As a new trader, it is your job to identify your strengths so you can narrow your focus.
What resonates well with you? Which types of trades tend to work out for you?
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8. Focus on What You Are Best At
Successful traders focus on what they are good at and avoid what they are bad at.
Avoiding areas of weakness is just as important as focusing on areas of strength.
Identify what you are good at and narrow your focus accordingly.
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9. Be Cautious of Being Right for the Wrong Reasons
The ultimate goal of trading is to make money. When your thesis is right, you make a profit and consider the trade a win.
There’s a caveat though.
If you are right for the wrong reasons, you begin to develop bad habits that will cost you money in the long run. For example, if you are rewarded for recklessness, you are more likely to trade recklessly in the future (which will of course lead to disaster).
To avoid this, analyze your winning and losing trades honestly and assess how the trade was managed.
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10. Avoid Uncomfortable Trades
Trading shouldn’t be uncomfortable. If you are uncomfortable every time you enter a trade, something is wrong.
You may be unprepared, in too big, or in unknown territory.
Focus on why you are uncomfortable so you can begin to correct the issue.
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11. Don’t Repeat Mistakes
Every trader makes mistakes. Mistakes are an unavoidable part of navigating the markets.
The best traders learn from mistakes and never repeat the same mistake twice.
If you make a mistake, diagnose the issue, correct it, and avoid the mistake in the future.
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12. Recognize That Stocks Don’t Go Up Forever
Short-term traders need to recognize that stocks do not go up forever. It is healthy for stocks to move in both directions.
Accept this so you can avoid being blindsided when a stock reverses its short-term trend.
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13. Know What You’re Good At
Last but not least, new traders need to recognize what they are good at (and bad at).
Most traders get in trouble when they stray from what they are good at and start trading without an edge.
If you are new to trading, you may not have an edge yet. That’s okay.
Take time to learn and develop your skillset and find out what you are good at (however long it takes).
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Thank you!
Thanks for the helpful advice!
Thanks bro
This should be a “Before You Start Trading Primer”
Mandatory to watch and understand.
Watch And UNDERSTAND.
Not just watch, and do your own thing anyway.
I am GUILTY of the last one, Too many times.
Thanks for the reinforcement
Great advice.
Thanks Nate! These short videos are invaluable to new traders or someone (like me) that’s been in a rut and needs a refresher/reminder on some things
Thank You for giving this information out for FREE !!!!
Always value in everything you put out there, thanks
I always think your talking to directly to me, and how you know what’s going on
with my trading and trade plan. I will get better, or die trying. always a fan
Thank you
I was missing one of these in the last few weeks! They are so good! Thank you Nate, you have helped me so much doing these posts!
Thanks man!
Great stuff Nate! This helps alot for us new guys.
Priceless – Thank you very very much Nate.
Thank you
Thank you. I learned a lot from this 13 QT. God bless you, All
This is not an advice.
this should be an ensiclopedia
this text should be in a public library and every new trader should memorize every word before jumping into the market.