The popular scenario according to which everyone comes in trading only for millions has become outdated long ago. If to exclude the opinion of the chronic losers, then successful investors and traders set very different purposes.
Those, who are hyperactive, but not ready to serious work, «waste» at the market a lot of time and money to prove to themselves (but generally – to people around!), that They! Can! Earn! Too!… $100-200; then, as a rule, abandon the market forever.
Some players set up small, but quite real purposes (medical treatment, education, the minimum purchases, financial stability) after which achievement prefer not to risk anymore. Such players leave real trade for the sake of investment, usually with small sums in long-term assets.
Every day I get up and look through the Forbes list of the richest people in America. If i'm not there, I go to work.
Such traders prefer to hold stable profit, and to develop constantly, trade for the sake of interest and pleasure, and only them have the highest chance to become the millionaire.
What scheme you wouldn't choose for yourself – don't wait for indulgences from the market. Before becoming a good trader, everyone should pass several obligatory stages.
Let’s get started.
It is recommended for reading:
So, at first …
The understanding that you have to work at market comes to beginners not at once. In advertizing video everything looks incredibly easy: download the trade terminal (free of charge!), fill up a deposit (in any way), «study» an arrangement of only two buttons (BUY/SELL) – and the treasured one million looms on the horizon already …
However, two main scenarios are possible on the way to understanding how to become a good trader:
Why do I say this?
Despite tough selection, the percentage of survivors after this stage is rather high – nearly 50. If the first losses and a stress do not break the beginner, then he comes to a comprehension of the following step (see Become a better trader tomorrow (Mike Bellafiore of SMB Capital).
And now …
After the first failures active «loading of a brain» begins: information is consumed in the huge portions and in any form, and books, articles, video, forums and tones of various analytics. There are paid training courses and also various trainings, webinars, signals, councils and advisers.
The logic «the quicker and more expensive is the better» forces everything that is seen/is heard/is read/is advised (but – it is misunderstood and it isn't verified!) to apply immediately in trading – and it is good if only on a demo account, or at least − on the cent one. Most often the beginner who is overloaded with information tries to trade on the full real account and full lot.
In 80% of cases after such gestalt training there are still losses, but now answers to the eternal questions «Who Is Guilty?» and «What to Do?».
So the bad consultant/broker/strategy/trading robot/a lack of money (to underline the necessary!) is guilty, but not the trader. Usually such period proceeds for 3-4 months, but some can «hang» in it for several years.
What’s the catch?
We undergo the basic training, further we study constantly, but independently. We surely check any information before use, as well as trading experience of others. We study everything, but we copy nobody, we check all ideas at a demo account. We try the trading strategy on the cent real account.
We go further …
Those who have survived after the two first stages, at last, realize the need for capital management. The stress hasn't passed yet, the fear of the transaction still appears, emotions still press waiting for the result, but there is already an understanding of risk as an inevitable market factor.
Because nobody has still discovered how to become a good trader without the correct money management.
Why is this so?
Problems of beginners not only in trade without StopLoss/TakeProfit, but also in attempts of fast earnings on trade assets with high or unstable volatility and also the wrong accounting of expenses on spreads/commissions, the amount of pledge and trade activity of the market. Without check of a technique of risk management on a demo account, we don't trade on the real money!
These three stages are considered as technical and if the enthusiasm wasn't gone, then now traders have a legitimate right to congratulate themselves – you have thoroughly approached understanding how to become a good trader. There are only several steps left (see here How to Become a Successful Forex Trader).
… just now the trader understands that:
It is not the strongest of the species that survives, nor the most intelligent, but the one most responsive to change.
From personal experience: in the course of training you will surely meet many people who know almost everything about the market (from the beginner’s point of view!), who can advise on any questions, read series of lectures on any subject, but they do not trade and do not earn.
The reason is simple – their knowledge lacks practice (please read! «Trading in the Zone: ...» Mark Douglas ).
Want to know a secret?
You should study your personal reaction to the market, disconnect everything that prevents hard work and to discipline yourself to open the transaction only on a signal of trade system, but not under the influence of emotions or external factors.
Prefer stability before the fast profit. Set the real and consecutive goals, considering as a positive result not only money, but also feeling of a victory.
But time moves on − and there is no profit because...
Inspired by advertizing and greed, the beginner at the market is similar to a hungry cat who runs after the each mouse. Two extremes are possible: either the analysis of the market is carried out too long and advantage grounds of an entrance are missed, or it is too many rash transactions.
There comes the moment when the tired trader convinces himself that he correctly «sees» the market, that the price behaves «technically» and will do surely(!) what is necessary to the trader! That is why a trade with the unreasonably larger lot appears, multiple averaging or expectation of a turn till critical losses.
Greed and ambitions «finish drawing» on the price chart what trade strategy «doesn't see» (see talk about Zonal Trading with Mark Douglas ).
So what’s the problem?
Your losses and a nervous breakdown don't prevent the market to go in that direction where is necessary for large players. Of course, if only you are not the market maker, and don't «make» this market by the million volumes.
Those who know how to become a good trader trade only the most probable signals. There is no signal – there is no entrance. Even if you want money very much.
And the last factor: understanding that you will have to…
Don't trust the advertizing: those who are going to trade by the principle - have observed the market, have opened the trade, have taken away a profit and have gone to the restaurant – the market «eats» the first.
Time spent in the market depends on the purpose: be ready to devote to the market not less than 8-10 hours a day, as any professional.
The transaction – is the culmination of the working process, the main time will leave on the analysis of the information. In process of the gaining experience, the efficiency of each your working minute will grow, and gradually time spent in the real trade can be reduced.
Every morn brought forth a noble chance, and every chance brought forth a noble knight.
If (it does not matter at what stage!) there is a certain trade idea and it seems interesting for you, or, for example, there are doubts in the current actions, don't shelve this thought.
Try to make something at once for its implementation (or checking), in other case either the idea will become irrelevant (the market will change), or the negative result will happen, or you will fuse and you will be lazy to do something at all.
From personal experience: if your life is filled only with the market – you will be poor irrespective of the result on the trading account.
What’s the bottom line?
Turn off rigid disposition on profit – live the full-fledged life − family, friends, a hobby, active life style. Otherwise, even small losses, insufficient (by the standards of your ambitions) profit and also any other negative, for example, the criticism from colleagues or relatives, will cause falling of a self-assessment, fatigue and a stress.
Periodically disconnect a brain from the market − after return you will «see» both all new, and that obvious which was passed earlier.
We will consider that our readers do not doubt the need of knowledge and experience.
To understand how to become a good trader, we recommend dismissing different «mental stuff» – high self-esteem, unreal imaginations, advices of others, negative opinions, laziness, greed and pity to ourselves. You need only trading experience and strong character therefore if you want a victory (and not just money!) – do not give up.
Trading psychology is one of the essential pillars of the Forex success, so even if you are an experienced trader, you shouldn’t dismiss a trading psychology advice.
Do you need a comfortable space in order to take control over your emotions and get prepared to the live trading?
Simply download Forex Tester for free. In addition, you will receive 20 years of free historical data (easily downloadable straight from the software).
Grow your patience, boost your trading skills, learn to avoid psychological traps without drawing your live account.
Share your personal how to become a good trader. Was this article useful for you? It is important for us to know your opinion – leave a comment below!