Some days I wish I could travel back in time 20 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 wish I would have known then how to keep all those profits and not go into a deep draw down in 2000-2002. I always had a big aversion to losing money after my internet bubble lessons, after that fiasco I have never really held losing positions for very long in anything, options, mutual funds, or stocks. I made a comeback and had amazing 20% return years from 2003-2007. These lessons of losses during the internet bubble burst saved me from losing money in 2008. My aggressiveness when winning helped me build good sized accounts over the long term with the great market conditions from 2009 -2016 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 I benefitted from 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 me a lot of money, time, and pain.

  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. Less activity costs less commissions and less activity in trends allows an easier way to make money. Less position size leads to smaller losses when wrong.
  2. It is better to specialize in trading, pick a market, pick a method and master it. It is better to be a master of one set up, pattern, stock, market, or system, than to dabble in many.
  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 on a time frame that is needed and 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 multi day and weekly 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. studying historical charts and backtesting will separate the noise from the signal.
  7. The weakest part of any trading method is the trader executing it. There are many ways to make money in the market but they all require discipline and consistency to make any of them work long term.
  8. The traders that manage risk exposure the best are generally 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.