Making money trading — is there any better topic? Not as far as I am concerned. I love making money — and I love the markets — and isn’t that what we’re all here to do anyway?
Well, not actually. Some traders view trading as a game, a fun pastime activity, a lottery even. But for those who are serious about trading and making money trading and viewing trading as a business, then here are my top 5 things you can do to start making money trading.
1. If you’re Losing , Stop trading
That’s right — you read that correctly. If you are not already making money trading, or worse, if you are losing money trading, then stopping trading, right now, for the immediate future. That’s because, if you are bleeding money, then stopping trading is just as good as making money. Trust me.
2. Find a method that’s right for YOU
This is going to take some time. You may need to read a few books, attend a few seminars, subscribe to a few gurus (or read this site) to get an idea of what types of trading methods are out there and available to you. Once you learn, you should immediately start looking for the method that fits your personality.
Do you like to trade longer time periods? Shorter time periods? With the trend? Against the trend? Do you like looking for bargains? Whatever the case may be, once you find out which method you are drawn to, learn everything you can about that method.
3. Keep a Trading Journal
This is one of the only ways I know to improve as a trader — record all of your trades in a journal. Write down the reason you took the trade, the set up, the amount you traded, the gain/loss and any new rules that came about as a result of the trade.
4. Keep your trades to yourself
Seriously. I know that trading might feel like a social activity sometimes with all of the blogs and the forums out there — but it isn’t. Trading is you vs. yourself vs. everyone else. And the moment you start publicizing your trades is the moment you will start to get nervous about them — and that’s the moment you will loose all rationality regarding those trades. Yes you can talk concepts and ideas, just keep your individual trades to yourself.
5. Learn how to loose
Just like tip #1 I bet this one sounds confusing. If you want to make money trading, why would you want to learn how to lose? Because, learning how to loose is the only way you will hang onto your money when you find yourself in a trade that isn’t working.
In fact, you will find yourself in a lot of trades that aren’t working –and if you don’t know how to close those positions out they will suck up all of your equity.
So there you have it – my 5 top tips for how to make money trading. Your mileage may vary!