Trading for a living is a dream that a lot of newbies in the world of finance have. For most, it will always be just a dream and nothing more. For a select few, though, trading for a living opens up a lot of pathways to freedom and living the life they’ve always wanted to. Hopefully, you can fall into this latter category. There’s no guarantee that this will be possible for you, or that it will be easy, but every good professional trader has a few things that they do in common. Let’s look at these factors, and see what you can do to adopt them for yourself.
1.) Develop a system.
All good traders have a routine or a system that they use when making decisions. They don’t just play off a hunch and hope for the best. This might work once in a great while, but doing so routinely will only lead to big losses.
Instead of guessing and hoping, pros have reduced the decision making process down to a formula of sorts in order to avoid human error as much as possible. The details of the system are not nearly as important as the fact that it works for you. This means that you need to understand it and be comfortable with it, including the amounts that it asks you to risk. If you have a $3,000 sized trading account, and you are asked to risk $2,500, you will probably not feel comfortable with this much risk. And if you are, you definitely do not understand your system.
2.) Refine the system.
Pros never settle for steady rates. If they make a 15 percent profit one year, they want 20 percent the next. And if they only reach 18 percent growth, then they have still improved. You should be focused on becoming as good as possible at what you do. Find different timeframes to focus on. If you are a short term day trader, try a few swing trades to try and branch out a little bit. If you’re focused just on small movements within the Forex market, look at a commodity like gold to see if that could help supplement your income. The markets are too complex for any one human to ever understand, which is a good thing since there will always be new opportunities for you to discover and use to your advantage.
This also means you need to stay well educated. There are so many news sources and training videos out there, and spending some of your day studying them to find new techniques and new strategies is a great idea. Just relying on the same things day after day will eventually not work. Markets change, and what works now will probably not work as well a year from now. Stay ahead of the game and anticipate trends before they begin. At the very least, what will happen is that you understand your market of choice on a more intricate level, and then can learn to monetize that.
3.) Take it seriously.
Trading is tough, and like any career, it takes time to develop. You need to make the proper investments into your new business, make sure you have the right resources and the right funding to keep going. Spending your life savings to get a trading account is not smart if you turn around and lose it in a week. What would you live on then? Trade only with money you do not need right away, and always be prudent with your cash. Not taking a career anywhere seriously is a recipe for disaster, so just because this is a self-based one does not make it different. If you treat it as your profession and give it the respect it needs, you will do much better than most other traders out there.