IF You Want To Be A Trader, 10 Things You Must Have

Trading is not all math, not just a system you plug into a chart, and not a path to easy money, you are going to earn it. If you do get lucky and make some quick and easy money you will give it back to its rightful owners eventually. Trading is a business that has to be ran in a professional way, every day. Trading is so challenging because it takes being good at many things at the same time to be a success. Why? Trading is a multidimensional sport.

Here is what you have to have to set the right foundation for success:

Work Ethic: You have to do a lot of work in back testing, researching and study of price action. We are talking hundreds and thousands of hours of work not a weekend with one book or a few charts. Usually have have to love the game of trading only passion can keep you working this hard long enough to break trhough to profitability.

Support from your spouse or partner: If your wife or husband does not believe in you and what you are doing that will become an obstacle that will likely not be overcome. You have to understand where they are coming from and ease their fears by not doing anything stupid like trying to trade for a living under capitalized or wit out a long term track record and a proven system. Also creating big financial losses will end their enthusiasm very quickly as well. You two have to be on the same team.

Capital: Without $30,000 as a part time stock trader or multiple six figures for an attempt to trade for a living you are simply under capitalized for active trading. Commissions and slippage will be a high percent of your capital. If you have only a few thousand dollars to trade with you would do better to do longer term trend trades and even hold investments as you add to and grow your capital.

Mind set: You have to embrace the risk and reward of trading real capital. The unknown can not stress you out and you can not let the uncertainty of short term results make you quit. A trader has to have an entrepreneurial mind set not one of an employee that expects a steady paycheck.

No Gambling: If you want to be a trader you have to remove the gambling instinct from yourself. You have to be like a casino measuring probabilities, odds, and possibilities instead of hoping, praying, and dreaming of the huge wins.

Time Table: You have to change your time table from get rich quick to steady returns and consistent growth of capital. The real path to big money is in the magic of compounding returns over multiple years.

Manage Risk: Good traders risk a little with the potential to make a lot, if you risk a lot in the hopes of making a fortune the odds are you will lose a lot over and over as other traders take your losses as part of their fortune.

Self Control:  A trader must be in control of their fear, greed, and ego at all times. These will all exist but how they are managed will make all the difference in success or failure.

Just Another Trade: Traders must trade at a position size that makes each individual trade just one of the next one hundred. No trade should turn the volume up your emotions so loud that you can’t follow a trading plan.

Long Term Results: Traders have to understand short term results can be random it is the faith in the long term results following a robust methodology that makes all the difference.  In the long term a traders edge will play out and lead to profitability. The trader has to plan on what draw downs are acceptable versus the returns they are looking for over the long term.