10 Steps to Profitable Trading

In trading there are things that matter and things that don’t. There are signals and there is noise. There is discipline and focus and also fear and greed. There are trends to follow and dips to buy. Regardless of how you trade and what timeframe you trade on there are common variables that almost all profitable traders have in common.

Here are the list of the 10 steps that every trader must follow to achieve long term profitability.

  1. You must have an edge. What advantage that you have will allow you to profit from other traders losses?
  2. To be profitable you will need big wins and small losses or a high winning percent of trades while keeping your losses small. Big losses is the biggest reasons traders are unprofitable.
  3. Pick trading methodologies that you believe in and watch to create systems based off of.
  4. Create a watch list of the markets you will be trading.
  5. You must develop a trading system that fits your beliefs about the market.
  6. A Back test must be performed through multiple market environments so you can see whether it is profitable long term and whether the annual returns and maximum drawdowns match your goals.
  7. You must develop position sizing parameters and risk management for trading your system.
  8. You will have to write a trading plan that determines how you will execute your system in real time.
  9. Discipline is required to follow your trading system consistently and long term.
  10. You have to enjoy the game of trading or you won’t stick with it long term. You have to find a way to trade that you like and does not stress you out. Having big drawdowns in capital is the fastest way to be mentally ruined in the markets and quit.

Here is your checklist now it is up to you to do the homework to discover the specific parameters you will use to achieve long term market profits. Getting through the learning curve is the first step while perseverance is required to get to the last step, life changing profits.