I already know what you’re thinking; the headline of this article is pretty bold. While it may be bold, but I assure you it’s not an exaggeration. I promise that if you read this entire article, think about it deeply and then actually implement the insight I’m about to share with you, you will see why the headline is no exaggeration.
Becoming a successful trader is not as difficult or elusive as you probably think right now. All that is required is several changes in your behavior and more importantly, in your thinking. I recommend reading this entire article through to the end because I believe the information I’m about to share might just be the ‘missing piece’ of the trading puzzle you have been trying to put together…
Step 1: Take the next week off from trading
This is an important first step to take if you want to immediately improve your trading and put a fast end to whatever trading problems you’ve recently been experiencing.
It’s very hard to objectively see the trading mistakes you have been making if you don’t take some time off from trading. So the first thing you need to do is exit all positions if you have any open and take the entire next trading week off from the market; do not be in any trades at all.
During this week, you are going to do a number of things, here they are in order of importance;
- Review and update / tweak your trading plan – If you haven’t been using your trading plan, that probably explains a lot about why you’ve been struggling recently in the market. So, get it out and update it; go through it and make sure it’s still what you want, if you don’t have one then you need to make one. If you don’t know where to start, then get my trading course because I show you how to make a trading plan within it.
- Shift your thinking – Soak up the feeling of not being in the market during your week off. Understand that THIS is how you should be feeling MOST of the time, that is to say, most of the time you should not be in the market. Most of the time you should be waiting patiently for high-probability trades to set up, in other words, you should trade like a crocodile. Understand that when you make the mental shift from thinking that you need to trade a lot to make money, to accepting that you need to be more patient and disciplined, you are getting closer to your goal of becoming a successful trader.
- Organize – I want you to organize wherever you trade from. If you have a trading office, organize it. If you don’t, then just organize your computer by cleaning out old files, etc. Next, organize your trading plan into a nice looking document; print it, laminate it if you want, just make it look professional and organized so you’re more likely to use it.
- Clean charts – If you haven’t already, take everything off your charts, that means all indicators etc. Set your charts up how I recommend here and before your week back trading, I want you to go through the markets you trade and add in the key chart levels BEFORE the markets open. You can learn how to do this in this recent article on how to draw support and resistance levels.
So, to recap, you should; take a full week off from trading to 1 – Review, update or make a trading plan if you don’t have one, 2 – Shift your thinking about trading from ‘needing’ to trade all the time to being a patient person who trades like a sniper, 3 – Organize your trading area, computer and trading plan, 4 – Set up clean indicator-free charts and draw in the key chart levels for the next week.
Step 2: Shift your definition of trading success
You will need to change your idea of ‘successful trading’ from one of ‘fast money, fast cars, etc.’ to that of learning to trade properly and following your trading method and trading plan. Slow and steady wins the trading race, not fast and impulsive. What you need to understand is that slow but steady progress and gains each month is what constitutes successful trading; the sooner you understand this and start behaving in a way that reflects that understanding, the sooner you will be a successful trader.
Stop thinking about the market as ‘constant opportunities’; I think of trading more as ‘a window to potential money-making opportunities, but with many traps and high risk’, so you have to be careful to not get caught. Through education, screen time and experience, you will eventually learn how to not get caught in bad trade signals and the many ‘traps’ that occur in the market each week. That doesn’t mean you won’t have losing trades, it just means you will be avoiding unnecessary losses that are born out of not being prepared and not being in the right mental place with your trading.
Step 3: Stop gambling and learn how to trade properly
There are basically two ways to approach trading; randomly like a gambler, and then there’s the correct way, which is like a skilled and patient market analyst.
Sadly, most people end up trading like a gambler, no matter how hopeful they are when they start out. Trading is a very easy thing to become addicted to, and once you become addicted to being in a trade, you have officially become a gambler in the market, whether you know it or not.
In order to avoid becoming a trading gambler, it really does take a conscious effort on your behalf. If you simply drift along and trade randomly with no proper training or trading plan, you’re going to end up gambling, it’s essentially just human nature and how we are wired. Successful trading takes more effort than what you might be used to giving, it takes strategic thinking and planning. I’m not saying it is ‘difficult’ or requires you be extremely intelligent, I’m just saying it takes more objective analysis and planning than what most people might think or be inclined to do.
The best thing to do is to learn how to trade in a simple, minimalistic manner using raw price action data. Successful trading begins with learning to trade properly, and if you haven’t yet learned how to do that then you need to make it a priority because it’s going to be your trading foundation. Once that foundation is built, you can build a trading plan from it and implement the mental ‘shifts’ I discussed in this lesson.