Look Deeper Into Your Trading Profession
If you’ve been following our articles recently, you should know all about the pitfalls of trading, especially when it comes to making it into a .
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We’ve told you that it’s one of the hardest professions to succeed in, and it has an inordinately high failure rate. Most traders who jump in fresh off their education return to their structured work style as they were unprepared for the demands and rigors that trading requires.
A big reason many potential traders are unprepared for this profession is that they enter the job with one tunnel view set ahead of them. They jump into the market because they want to make money. The sole desire to make money prohibits many newbie traders from looking deeper into the in order to discover that there are many more layers than just buying and selling in order to turn a profit.
The layers and complexities beyond this binary fantasy give way to unique and challenging ways for each and every trader to craft personalized trading strategies and methods of trading according to their own strengths and weaknesses.
There are many variables in composing a comprehensive trading strategy that accounts for all of your strengths and weaknesses. Remember that no matter how small the details of your preferences are, include them in your master plan (the right chair could be just as important for you as the right trading platform). forex trading
In this article, you’ll find the important factors to consider in order to understand our.
Trading Timeframe
Are you a night owl or a morning person? The good news is it doesn’t really matter when it comes to trading. Unlike other professions, which have rigid hours and set working times, if your style is trading while everyone else is asleep, you can do so. The downside here is that you’ll have to be your own disciplinarian. With no preset rigid framework imposed by external forces, the discipline to place restraints on yourself is tremendous. If you can’t regiment yourself, trading on your own might not be right for you.
Keep in mind that it’s important not to consider money when determining the best time for you to trade. This designation should be based solely on what works for your biological clock. You need to do what’s right for your body, not just your idealized income level.
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Trading Setup
The next variable to understand and define within the context of your skills and personality is which trading setup works best for you. We’re not talking chairs, computers, or monitors (although that is important), but rather how much of a trader you are and how much of a fundamental trader you are.
The two are not mutually exclusive, so whatever formula you eventually settle on will have elements of both aspects at varying levels to complete a whole setup. For example, you might realize that you are 90% technical and 10% fundamental.
However, before you start tweaking levels of the setup, it’s important to master at least one of the types. From that mastery, you can then supplement with what is perhaps your weaker setup. The two combined will then be your total trading setup.
Trading Risk Tolerance
We’ve written extensively on the importance of recognizing and tailoring the amount of risk you’re willing to take to your specific strategy. Now the question is how do you determine what the right amount of risk for you is?
A good way to discover your tolerance is to open a small live account with $100 and trade nano lots. Use a calculator to show you how much you should risk on each trade in order to avoid a predefined drawdown. If you’re ok with losing 9% of your account but not 10% on a trade, give yourself those parameters. After this, input the rest of your stats and play around until the risk of hitting a 10% drawdown is as close to 0% as you can get it.
Trading Strategy as a Reflection of your Personality – The Bottom Line
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When you combine these three elements in a comprehensive trading strategy, you’re well on your way to trading under conditions that are ideal for your personality and style. By following rules and parameters that have been tailored to your unique needs, you’ve built an environment in which you should be able to thrive. But just because you built it based on your needs doesn’t mean you shouldn’t constantly check to see if it needs updating. You might change in subtle ways, and therefore constant attention should be put on your strategy to make sure it’s up to date with your latest needs and wants.
As always, remember that trading successfully will ultimately fall entirely on you. In the end, your mentors, teachers, and guides can only give you the tools to learn what is eventually right for you. Trading doesn’t work on imitation, and no matter how good of an example you have, it will always be just that. Success in the market will come when you chart your own sustainable course according to your strengths. Don’t dwell on what you can’t do. Instead, build yourself around what you can. There are no failures as long as you are always learning and building toward your perfect trading ecosystem.
