New Trader 101
The right mindset
  • Your have to be able to manage your emotions.
  • You have to have faith in your ability to trade your plan with discipline.
  • You have to do enough homework that you will have faith in your system and your prospects of being profitable.
  • You must manage your stress so you don’t make mistakes because of mental wear and tear.
The management of risk
  • Capital Preservation has to be your #1 priority.
  • Your expected win/loss ratio and risk/reward ratio must be in alignment for profitability.
  • Never lose more than 1% of your total trading capital on any one trade.
  • Your risk of ruin for your trading system must be reduced to zero.
A profitable methodology
  • You must implement your backtested trading system with a great trading plan.
  • Your position sizing must be based on how much you will lose if your stop loss is hit.
  • Your entry signals must give you a high probability of profitability.
  • Your exit strategy should allow you to end every trade with either a big win, a small win, or a small loss—never a big loss.
All of these are covered in detail in our book New Trader 101.