10 Things I Wished I Knew When I First Started Trading

10 Things I Wished I Knew When I First Started Trading


10 Things I Wished I Knew When I First Started Trading

                                                                                                                                                                                                                                                                                                        Some days I wish I could travel back in time 15 years and teach myself what I have learned in the markets the hard way. I was fortunate to make money early on with the benefit of the nineties bull market, I just wished I would have known then how to keep all those profits and not go into a deep draw down. I always had a big aversion to losing money after the March 2000 internet bubble popped after that fiasco I have never really held losing positions for very long in anything, options, mutual funds, or stocks, which saved me from losing money in 2008. My aggressiveness helped me build good sized accounts because when I was right about an entry and captured a trend I would let the winner run for as far as it would go. These were all good traits but here are the 10 things I wish I would have really understood from the beginning when I actively entered the markets, these tips would have both made me and saved my six figures, easily.

  1. In trading less is more, less activity generally leads to more profits and smaller positions sizes leads to better odds of keeping profits over the long term. 

  2. It is better to specialize in trading, pick a market, pick a method and master it.

  3. Trading is not about being right all the time it is about limiting losses when you are wrong and maximizing profits when you are right.

  4. Only check prices as needed required for your method, watching ever single tick is not optimal for the vast majority of trading methods.

  5. The big profits are in the trends not the intra-day range.

  6. It is crucial to understand the difference between what is noise in price movements and what are real signals. 

  7. The weakest part of any trading method is the trader executing it.

  8. The traders that manage risk the best generally are the ones that win in the long term.

  9. Only trade liquid markets, stocks, and options. Wide Bid/Ask spreads can make a good system unprofitable. 

  10. If you trade in the direction of the trend for your time frame, manage the risk of ruin, and stay disciplined you can make money in the markets, but if one of these are missing it will cost you money to trade, sometimes a lot of money.