10 Important Trading Lessons & Tips

10 Important Trading Lessons & Tips

The key to learning and growing as a trader is to learn from mistakes that you make and not repeat them. The first time you commit an error that costs you money is just a mistake the second time is stubbornness, the third time you make a mistake is foolishness. You can be active in the markets for a decade but if you repeat the same mistakes over and over it is like being a new trader ten times. Learn to stop doing the wrong things and start doing the right things.

Here are the top ten lessons and tips I learned the hard way a long time ago. I hope this list shortens your own learning curve.

  1. If you are not trading a quantified strategy then you have no edge and your actions are just random in nature. You will just have strings of luck and misfortune with no consistency.
  2. Finding a winning system with an edge is only the first step to profitable trading. You also have to follow it with discipline and position size correctly for long term success.
  3. No system or strategy works in all markets. You need to diversify your strategies and watchlist for greater odds of success.
  4. Trade signals not opinions. Go with the flow of the market trend, that will be the path of least resistance to profitability.
  5. Back test for study historically charts for any strategy before you put real money at risk.
  6. Being patient with winning trades and impatient with losing trades.
  7. Greed can turn big small trading accounts to small ones and patience can turn small trading accounts into big ones.
  8. The smaller the trading timeframe the more the noise the higher the timeframe the clearer a trend becomes.
  9. You don’t have to be a perfect trader just get enough of a move to be profitable.
  10. In trading your greatest edges will come from discipline and proper position sizing. Just staying in the game is your first priority, most people can’t function without being overwhelmed by their own emotions and ego. Manage these and you will be a top trader and be ready for your own system development.