7 Principles to be a successful trader
- Start with the foundations. You don’t need to do extraordinary things; you need to the ordinary things extraordinarily well.
- It’s what you can do, not what you know, that sets you apart. Think, do, and produce. Not Remember, Recite, and Regurgitate.
- Take initiative. Go out and find solutions rather than just doing what people tell you to do.
- You need the challenge to change.
- If it doesn’t happen on the pitch, then it won’t happen in practice. Identify the errors in your performance and then focus your training on that.
- Train in extreme conditions to teach yourself how to fight through adversity.
- Variability: learning is not mindlessly repeating solutions, it’s finding solutions repeatedly. Find a solution, then move on.
There is a common misconception that there are three traits to be successful: ambition, resilience, and talent. While all successful people have all three of these, new data have indicated that there are other, less obvious factors. Of course, you have to work hard, push through adversity, and have skill if you want to achieve your goals (especially in trading); however, there are other guiding principles that give insight as to why you can be ambitious, resilient, and talented, yet still not achieve your goals. In today’s post, we will investigate several principles that are not only necessary for success, but have the highest correlation with it.
As a trader, your personality must suit your field. Introverts and those who are soft-spoken don’t do well on the trading floor. Extroverts shouldn’t isolate themselves during their day trading. But how do you know what fits your personality? What are the factors that are overlooked by mainstream leaders? Today, we’ll answer these questions by looking at rules, morals, and truths that you probably know in the back of your mind but have never explicitly stated.
What is the new term “performance sweet spot” in scientific literature?
Each person has a performance sweet spot. The definition is best constructed via sport analogy. In baseball, there is a 3 cm x 2 cm area on the bat known as the “sweet spot.” It is where, if hit, the ball travels the furthest and the hardest. In almost every home run, the ball hits the sweet spot (the fat part of the bat). So, even if you have the strongest swing, took the most batting practice, made solid contact, and worked out more than everyone on your team, if you don’t hit the sweet spot then you did not maximize the distance of the ball. Thus, the sweet spot refers to the ideal situation or scenario that an individual can place himself in to succeed.
In trading, this means you perform at the sweet spot when the goals you are pursuing align with what makes you unique. This is why knowing your personal strengths is essential. Someone who does not take confrontation well wouldn’t succeed in investment banking, but might succeed in day trading in which a software gives you feedback on your performance. The sweet spot is found at the intersection of three things: your strengths, interests, and values. Know what you’re naturally gifted at. Can you extract analysis from quantitative data without using complex algorithms? Do you pay attention to detail like no other? What do you like to do? Are you obsessed with staring at the computer and reading charts? What gives you significance and purpose? These questions may help guide you to hone in on what you’re best suited for. Granted, consistency and discipline will result in your long term success in day trading, but your potential can’t manifest if you’re not performing in your sweet spot.
As a beginner trader, what is one unchanging principle for success?
Learning about traders who use six monitors with tens of thousands of dollars of software can be daunting. How can I, someone with a laptop and a new trading account, be as successful as them? The answer is simple: you do not need to do extraordinary things. You need to do an ordinary routine extraordinarily well. This is mastering the fundamentals. The baseball teams that win championships don’t make the craziest plays, with lunging catches, and 250 ft throws. The team that wins championships is the one that makes the least errors; the one who makes the routine double play 99/100 times.
As a day trader, start by understanding beginning technical analysis models. Learn them very well, be comfortable with them, and use your money to experiment with them. Know how to play the swings and how and when to execute futures orders. Find free software that can help you maximize the aforementioned categories and do this extraordinarily well. Only when you have the fundamental trading knowledge down is expanding into the advanced strategies prudent.
While trading for beginners can seem like climbing a mountain, there are two key tools for success: know where and how you can perform in your sweet spot, and master the fundamentals. Watch beginner YouTube guides, read books, and learn from those who are successful. Only once you know your strengths and weaknesses can you truly unlock and actualize your potential.