Learning ‘How To Trade’ can be analogous to building a house, it isn’t until it is complete, that Consistent Profitability can be realistically achieved. The foundations cover such things as:
having a comprehensive Strategic Personal Trading Plan; grasping the Basics and how to use your chosen Trading Platform and associated Trading Tools. On the Ground Floor we have to understand and adhere to Robust Risk & Money Management (Money), be able to read Price Action and identify Key Levels or Zones and be competent at Multi-Time Frame Analysis, to read Wave Structure and to find potential Confluences, Trends and Potential Trades. We also need to understand and Master our chosen Trading Strategies. Then there are the actual mechanics of trading, the ‘Trading Process’, such as Analysis, Planning, Executing and Managing a Trade. Plus we need to understand economic and geo-politcal News Flow and how the Markets work and how Money flows. Record keeping and keeping a Journal also have a place as we focus in on improving our Trading Process. Only when you have mastered the mechanics or Method, can you really start to construct the 1st Floor. The 1st Floor is focusing in on ‘Myself’. This where we get into the realms of gaining Market Experience, identifying and over coming the common emotions of Trading Live such as Fear and Greed, FOMO and Recency and much more. We really start to work on our Trading Mindset / Head Space or Trading Psychology. We start to control our emotions and develop Patience and Discipline. With that comes an almost ambivalent attitude to the Markets, where the need to trade is replaced with only trade, when the market is ready and shows us what to trade and only trade when we are in a ‘good place’. We focus in on ourselves before we trade, we take care of ourselves in terms of health and well being, exercise, nutrition and so forth. This is because we realise that we are, in effect, our Strategy and our Edge and have at last got the roof in place and our House of Trading is complete.
That said, as with every building, it will need maintenance and attention in order to preserve its’ integrity, plus of course a bit of gardening!
As we have constructed our ‘House of Trading’ there will have been set backs along the way, as with most building projects, but with good project management and a clear focus on the final outcome, the building progresses. It takes time, money and effort and it helps to have an ‘Architect’ (Coach/Mentor) to guide you along the way, plus you may need additional ‘Tradesmen’s help and expertise at certain points.
If you reflect back on the construction of your ‘House of Trading’, you may realise that you have developed from a Mechanical trader, to a Subjective one and finally evolved into an Intuitive Trader who is Independently Minded and Consistently Profitable.
Top Trading Tip: Analyse where you are at, in building your own House of Trading, and note what Foundations, Building Blocks, Rooms, Windows, Services, Roof etc that may be missing or not fully built. You may need some help and guidance undertaking this task too. Once done, then work on those highlighted areas, and seek further help where needed.