Attend Trading Courses that Sell the 3 Magical Stances
The market is flushed with seminar and training providers who claim that their respective trading methods can achieve very high returns. Therefore, it is justified that these courses command significantly high fee. However, at the end of the day, all the courses are the same. Basically they are selling the 3 magical stances that every successful traders need to equip themselves with. In a descending chronological order of importance, they are: Mental Ability, Money Management and the Methodologies to trade. It is not uncommon that most of the courses went the other way round. They focus more on the methods, money management and then the mentality portion of trading. That is a MEGA flaw by itself.
Stance 1 - Mental Ability
The mental ability, otherwise known as the psychology of trading, is the MOST important aspect of trading. It separates the wannabe and average ones from the 5 stars traders. A trader can be exceptionally proficient in his analysis of the market, and even able to hit a remarkable and consistent market projection. But that's about it. Period. They do not participate in the market actions because of handicapped mental ability. That is why they are called The Analyst; all talk and no go. The confidence and the ability to reconcile their analysis and putting them into action simply do not exist. Of course, at the other end of the spectrum, we have traders who had no qualms on putting in their orders, not knowing what they are in for. They cannot differentiate between trading and gambling. A successful trader is someone who can exercise control over his trading limits. Stay patient, go small (or nil) when the market condition is not favourable and stack up the lots once the market gain momentum, whether to long or short. General training providers, very often, tend to oversee the importance of this aspect. They simply put on a few slides, go through them, throw in some life stories, and that's it, the segment is completed in half an hour. You can't "paper trade" to learn the psychological aspect of trading. But if we cannot learn it from theories, then how to build up a successful trading mentality? The answer is "Live Trading". Very often, most of the courses would throw in 2 to 3 days of seminars plus an additional of 1 to 2 live trading sessions. That is simply not enough. Live trading must be done with continuity. Traders don't have the luxury of analysing End of Day data to enter trades. The price fluctuates in a dazzling manner. Decisions had to be made on the spot. A span of continuous trading over at least 3 months could see a beginner picking up the skill considerably, though not necessarily his account size. But which training provider is willing to commit such time and effort to really groom someone to be a successful trader?
Stance 2 - Money Management
Most of the courses preached money management is all about protecting the downside. How to identify stop-loss level and cut loss when the maximum tolerance had been breached. Again, this has to be related to your mental ability to cut when it's due. There will always be cases whereby the trader compromise on their stop-loss level in hope for some divine intervention so that the loss can be reversed. But money management is not just about cutting losses. It's about determining an appropriate start up capital, managing operating cost like subscription to charting and news services, working out realistic projected monthly revenue, managing cost in procurement of equipments needed to set up your personal trading station and so forth. It is akin to a self-employed business whereby one has to record his profit and loss, tabulation and records. This is to enable reviewing, retuning and refining the way you manage your money.
Stance 3 - Trading Methodology
This is a segment where there is no need for any further elaboration because they are easily available in bookstores, courses and internet. Basically, there are 2 schools of thoughts; the fundamental analysis (FA) and technical analysis (TA). Essentially a day trader will employ TA to capture daily movement where an investor, with a longer trading horizon, will typically use FA. Whichever it is, never believe anyone who promised a perfect or 100% trading system. There is no such thing. Any system or method that can deliver a 70%-80% winning probability would be attractive and realistic enough.
At the end of the day, the crux remains if the methodologies are being integrated together with the other 2 Ms for trading. So take note, the next time you would like to invest in yourself to learn trading, do attend trading courses that sell the 3 Magical Stances, especially Stance 1.
Right below this article you are going find a link to discover more about how to become a full time trader by using technical Analysis skill.
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