There are many paths to trading profitability, but all the paths have similar steps. Here are some important steps you must follow on your path to profitability.
- The amount of success you have in trading is primarily based on the amount of homework you do.
- You must develop a winning trading system that is based on previous price history, trend capturing in your time frame, and great risk/reward setups.
- You must have a quantified trading plan for executing your system with real time entries, exits, and position sizing.
- Position size so you never take big losses. Never let any trade risk the ruination of your account.
- Learn from those that have consistently won in the markets.
- Read the best trading books ever written.
- Study a market’s price history, and how it related to technical indicators.
- Study historical chart patterns.
- Be aware of your emotions and ego so you can continue to trade based on facts instead of how you feel.
- Perseverance pays in trading. Let losses be lessons and your mistakes be your teachers. Don’t quit when you’re frustrated; keep going until you are successful.