Discover the key steps to becoming a profitable trader with guidance from a performance coach. Learn how to identify your weaknesses, harness your desires, develop effective plans, overcome challenges, and achieve a new equilibrium in your trading journey. Ready to get started with the 5ers? Click on the banner below for a discount.
Once upon a time, there were three traders A, B, and C. Trader A was a novice who decided that they could make trading into a lucrative income stream. After watching hours of YouTube videos practicing for weeks with a demo account, you finally feel you have what it takes to make some money.
Trader B has done trading on and off for over 5 years. In this time trader B has made some money and taken some substantial losses. Fearful that trading is too risky, trader B is considering liquidating his accounts and moving his money into IRA's and Life Insurance contributions.
Trader C is a profitable trader. To make quick returns they use 3:1, Negative Risk/Reward, and over-leveraging. After successfully passing the prop firm challenge, Trader C immediately blew his account on the first trade on the funded account.
Most traders who read this may or may not have had similar experiences themselves but they certainly can identify with the differences between trader A, B, or C.
Some traders may even see themselves reflected and obviously that is the point these are not just random profiles but actual traders I know and coach. In fact, I just happen to be Trader C.
As a case study on how trading compares to gambling, I would recommend that even profitable traders need to manage their own behavioral psychology.
I was trader C, after meticulous execution on two stages of the 5ers accounts specifically the 5K High Stakes program.
I immediately blew my account on my first trade.
I was so excited about the possibility of receiving payment that I completely abandoned my risk management system and the strategy I used to pass the prop firm, and i started trading another system I developed based on 1 minute scalping.
I learned that consistency matters and that my own desire to return quick profits was actually the poison that ruined my performance and made it impossible to achieve my goal.
I needed to make money really badly and I had the skills to perform consistently but I still didn't achieve the results that I deserved.
Devastated and down $40, I decided I had two options to quit while I'm behind or to dig deeper and assess what I was up against in terms of behavioral blockages and impulsiveness that threatened to transform the prospects of a professional long-term trading career into a short term gambling outfit.
I decided to dig deeper and take responsibility for my own success and failure. I stopped looking to blame the broker, or slippage, or the invisible market maker. I made a choice that it was my responsibility for every trade, every error and every mistake.
To become a profitable trader, it is essential to start by identifying your weaknesses and needs. This self-reflection allows you to understand where you may be lacking in knowledge, skills, or discipline. By recognizing these areas of improvement, you can take proactive steps to address them and enhance your trading performance.
One way to identify your weaknesses is by analyzing your past trades and reviewing your trading journal. Look for patterns of mistakes or missed opportunities. Is there a particular strategy or concept that consistently causes you trouble? Understanding your weaknesses and needs provides a solid foundation for improvement and growth as a trader.
Its clear that traders inevitably become their own worst enemies. Bad habits, impulses, and unreasonable risk are the leading cause of how traders blow their accounts.
The desire to make money can become a need that is a weakness as we saw earlier in our example with Trader C.
Desire plays a crucial role in becoming a profitable trader. It is the driving force that keeps you motivated and focused on your goals.
On the flip-side its the same desire that causes you to doubt trades, move your stop loss, or make mistakes on trade execution.
To harness your desires effectively, you can start by setting specific and achievable performance goals. These goals should align with your overall trading objectives and provide a clear direction for your actions.
Additionally, visualizing your success and the rewards that come with it can help strengthen your desires. Imagine the financial freedom, lifestyle, or achievements you aspire to attain through trading. By connecting emotionally with your desires, you can stay committed and dedicated to the process, even during challenging times.
Every trader faces opponents in the form of market challenges, psychological barriers, or external influences. To become a profitable trader, it is essential to confront and overcome these opponents.
One effective approach is to develop a growth mindset and view challenges as learning opportunities. Embrace the mindset that setbacks and failures are stepping stones to success. By re-framing obstacles as chances to learn and improve, you can maintain resilience and continue progressing towards achieving your performance goals.
Additionally, seeking support from mentors, fellow traders, or performance coaches can provide valuable guidance and strategies for overcoming opponents. Surrounding yourself with a supportive network can enhance your trading journey and help you navigate challenges more effectively.
A well-developed plan is crucial for becoming a profitable trader. This plan should outline your trading strategies, risk management techniques, and specific actions to achieve your goals.
Start by defining your trading style and determining the markets and instruments you will focus on. Research and educate yourself about the fundamental and technical analysis tools that align with your trading approach. Additionally, establish risk management rules to protect your capital and ensure long-term sustainability.
Regularly review and update your plan as needed, considering market conditions, new opportunities, and lessons learned. An effective plan provides structure, clarity, and a road map to guide your trading decisions and actions.
Trading is a battle that requires discipline, patience, and adaptability. Navigating this battle successfully involves staying informed, managing emotions, and continuously improving your trading skills.
Stay informed by keeping up-to-date with market news, economic indicators, and industry trends. This knowledge enables you to make informed trading decisions and adapt to changing market conditions.
Emotional management is also crucial. Develop strategies to control fear, greed, and impulsiveness. Implementing risk management techniques and sticking to your trading plan can help mitigate emotional decision-making and maintain discipline.
Lastly, commit to continuous learning and improvement. Engage in ongoing education, attend trading seminars or webinars, and analyze your trades for areas of improvement. By consistently seeking growth, you can navigate the trading battle more effectively and increase your profitability.
Life is uncertain and markets even less so. You will lose maybe tiny consistent losses, or large abrupt and unexpected draw down. If you follow this guide you will never go to the market without a plan and whether you win or lose you still have an opportunity to stay in the game.
As you progress through your trading journey there will be opportunities to grow and learn from mistakes that you have made in the past.
These moments of intense introspection will drive your desire towards achieving your goals at the highest level. Take an inventory of the moments of self-revelation, when they occur and how they made you feel. These moments occur when you gain new insights, expand your mindset, or discover your strengths and weaknesses.
Embrace these self-revelations as opportunities for growth and development. Reflect on the lessons learned from successful trades as well as from mistakes or losses. Use this self-awareness to refine your trading strategies, improve your decision-making process, and enhance your overall performance as a trader.
It's impossible to change what you don't measure. Even more impossible is the struggle to maintain consistent performance day after day without being able to rely on anything aside from your education and your capacity to execute day after day, product after product across multiple time frames
Becoming a profitable trader involves achieving a new equilibrium in your trading journey. This equilibrium signifies a balance between your trading skills, mindset, and emotional well-being.
To achieve a new equilibrium, focus on maintaining consistency and discipline in your trading strategies. Stick to your plan, follow your risk management rules, and avoid impulsive decisions.
Additionally, prioritize self-care and emotional well-being. Engage in activities outside of trading that promote relaxation, stress reduction, and mental clarity. A balanced lifestyle contributes to better decision-making and overall trading performance.
By continuously refining your skills, maintaining discipline, and prioritizing your well-being, you can achieve a new equilibrium as a profitable trader.
Trading in financial markets include several risk including but not limited to losing your money. Nothing in this article should be taken as advice or recommendations. It is your responsibility to execute good trades and manage risk. We recommend seeking the guidance of one of our professional performance coaches for more information.