We know from our own experience that trading is very difficult and challenging. No wonder that 40% of the traders quit after 1 month and only 7% are still active.
But why is it so difficult? The reason why so many traders give up too early and not seeing the results they are looking for, can be boiled down to 8 points. The following points will help you understand what is required to survive your first year as a trader.
”How long will it take for me to become a profitable trader?”- it is a question which, above all, ”newbies” tend to ask. Yes, it is possible to become a profitable trader but it is much more likely that you will lose several trading accounts before it. Ask instead, ”how can I avoid losing money?”
False expectations can lead to disappointment and frustration. Accept that you are not going to deliver your trading for the next few years and focus on the process. The money will follow.
Focus better – the first year
Take the first steps – become familiar with the market and the market dynamics, you should look for a decent mentor (more on that later) and begin studying as much as you can.
Select a method or approach and put all the focus on to learn the one strategy. During your handelskarriär you will be likely to go through several systems and try different things, which is normal. Nevertheless, one should keep away from the ”systemhopping” and change its position each month.
Demohandel recommended for new traders. This type of trading gives you the opportunity to familiarize yourself with how handelsmekanik and market dynamics work.
The Demo, however, can have a negative effect – you will not feel the seriousness of the losses and the psychological problems in trading. To create a small live account is a great way to exercise. Be careful so that you do not start to play when your trading account is too small.
Learn about your tools
We have briefly touched on systemhopping and it is important to avoid this terrible behavior and train of thought.
Investigate it, you don’t really understand. If you want to become a professional, profitable, full time trader, it is important that you stay away from signaljakt and get rich quick mentality.
Become an expert in your field. It means that you choose your trading strategy and learn as much as you can.
Find a mentor
Mentors are great, but can also be the complete opposite. There are many charlatans out there. Some new traders are lured with promises of fast money, the doubling of your account and other too-good-to-be-true claims.
What do you need a mentor for?
Almost all profitable traders use systems that they’ve somehow developed – at least to some extent. A trading system is something very personal and it must fit your personality and your character. Look for a mentor that promises the ”best return”, but someone who can teach you about trading in general. Someone who is building your train of thought, talking about handelspsykologi, the long-term handelsbegreppet, will help you to avoid common problems, prepare and affect the ”your journey”.
In addition to the mentor, there are a few more things to think about. There are great trade books, written by the best actors of all times. Here is our list of the 4 best books for beginners:
Peter Brandt – Diary of a Professional Commodity Trader: Lessons from 21 weeks of Real Trading
Steenbarger Trading Psychology 2.0: From Best Practices to Best Processes
Steve Burns – New Trader, Rich Trader 2: Good Trades, Bad Trades
Marty Schwartz – Pit Bull: Lessons from Wall Street’s Champion Day Trader
We recommend Trader After Dante, Assad Tannous and the blog of the NBT.
Diary and a trading plan is also a must if you want to improve your trading.