#1 Trader Know Thyself.
The first step the trader must under go is know about themselves.
Do you love the action of day trading or would you prefer holding positions for long period of times letting a trade play out? You must pick a style that fits your personality, position trading, trend following, option plays.,day trading, growth investing, CAN SLIM, momentum trading, break out trading, chart pattern recognition, or the Darvas method.
#2 Pick a market
Will you trade stocks, options, futures, commodities, bonds, or currencies?
#3 How aggressive will you be?
Understanding your level of risk correlates to your level of returns how much will you risk per trade? Do you have a large portfolio and want to risk a conservative 1% of capital pr trade? 2%? Will you be aggressive and risk 3% or more per trade? Are you willing to go all in on trades with some speculative money and understand that big bets can cause you to lose your whole account? Do you want to make 15%, 25%, or 50% a year? Are you willing to take the draw downs associated with that level of risk?
#4 Doing the work
Do you understand that trading is a profession like any other and requires the same level of reading, studying, and learning as any other. Like other professions you will not make money at the beginning you will instead pay in time, education, and losses of capital. Trading is the hardest easy money you will ever make. If you want to trade you will be required to study charts, read books, maybe get coaching, have a mentor, do research, and maybe attend some educational seminars.
#5 Learn to lose
In trading you have to get use to being wrong about half the time. While traders will have streaks when they are right 10 or 20 times in a row they will also be wrong 10 times in a row on many occasions. Very few other fields have successful professionals that are wrong as much except entrepreneurs and professional gamblers. Trading is sort of like baseball batting averages where your runs batted in and home runs off set your strike outs.
#6 Master YOUR method
In trading it is more important to be a master of your method than a jack of all trades and master of none. You need a winning method that you believe in that you can trade with faith.
#7 Trading environment
Half of your success will be determined by knowing what kind of trading environment you are in. Bull market, bear market, volatile, or range bound. Also the instruments you use to execute your trading will determine your success. Your market has to fit your style. Trend traders can’t trade a flat blue chip stock and most swing traders can’t successfully trade a strongly trending currency.