The Fundamentals of Trading
Have you ever heard of anyone who is successful is lazy?
Hard work is fundamental to being a successful trader. Without it, the chances of success are almost zero. Hard work can be the difference maker in your trading career. Tuning in to your screen repeatedly with a purpose of gathering important trading information is the definition of Hard work. We identify support and resistance zones. Watch for patterns to form. Find pullbacks. Look out for extreme movements. The most successful trades are the easiest trades. Everyone is looking at the same pattern. Volume validates the pattern. We call it EASY MONEY. This results from grinding, clocking long hours to watch, analyse and learn so that you will be prepared when the same setup appears again.
Traders make bets on price actions, investors make bets on companies
All traders start from somewhere. No one is born to trade. Or let me rephrase it. When we are in primary school (7-12 years old), the teacher will ask us to write in the journal notebook “What do I want to be when I grow up?” Many of us will write doctors, teachers, lawyers, pilot etc. Of course there are some outliers like taxi drivers, princess (hello kid, this is not a job) and more. However, there is not a single one that wrote “I want to be a trader.” So you see, traders are more of nurture than nature. There are always exceptional ones like Jesse Livermore. For the rest of us, we just have to keep continue to sharpen our skills and hone our craft. We need to adopt the growth mind set.
Hard work derives from having a trading plan. What is your trading strategy? We make trading decisions based on few factors. The big picture which is known as the daily chart, the execution time frame which is either 1 min or 5 min charts and reading Level II.
Remember, volume confirms the pattern. Volume provides liquidity. You will want to expect an increasing volume when the pattern breaks out. Otherwise, you are probably the only one or a handful looking at that chart. Most of the times, the patterns do not work in such cases. Scan through top volume or high relative volume stocks. Train your eyes to spot for patterns.
E.g. Bull flag, ranging, reversal candles, support & resistance etc.
Do not idle. You are here to work, search for good setups and be profitable. Do not trade for the sake of trading. Many of us fall into that trap unconsciously. Be patient and spend your day trading searching for quality setups. Do not rush and have the FOMO (Fear of missing out) mentality.
Information gathered yesterday or even last week may lead to a good trading opportunity today or in the future. A support or resistance level discovered previously may break today and provide an excellent trading opportunity.
Luck tends to come to people who are prepared
Aim to be the person who works hard every day. Hard work contributes to consistent trading success. Trading is not a get rich quick scheme where many “successful traders” tend to portray that picture or lifestyle to you. It is difficult to be a profitable trader but not impossible. It takes grid, discipline, passion and a growth mind set to be one.
There is no shortcut. You are in control of your time. There is no boss to report to. You do less or more, no one will reprimand/praise you.
You treat it as a hobby, you will earn like a hobby.
If you treat it as a business, you will reap the rewards of a successful business.
Trading can be lonely at times. It is advisable to be in a like-minded community that is willing to help one another to develop the required skills and cultivate the right habits so that everyone can blossom and flourish together. Share your trading experience. Voice out important support and resistance levels. A community should not be boosting or competing who earns more or has a bigger car/house. A community should be sharing good trading ideas and communicate openly. It is challenging to find one. If you manage to, congratulations.