If you know the problems of trading, you can simply avoid them. Little mistakes are inescapable ,eg entering the incorrect stock symbol or wrongly setting a buy level. But these are excusable, and, with luck, even profitable. What you've got to avoid nevertheless, are the mistakes due to bad judgment rather than straightforward mistakes. These are the dangerous mistakes which ruin whole trading careers rather than just 1 or 2 trades. To avoid all of these problems, you've got to watch yourself closely and stay tenacious.
Think about trading mistakes like driving an auto on icy roads : if you know that driving on ice is threatening, you can avoid traveling in a snow typhoon. But if you do not know about the hazards of ice, you could drive as though there were no threat, only realizing your mistake once you are already off the road.
Too many traders are fixed on only one market. They may trade only the foreign exchange Greenbacks / EUR, or the E-mini Russell, or the E-mini DJX , or merely certain stocks, and so on. While they may feel a certain sense of expertise or mastery over this one market, nobody, regardless of how experienced they are can foretell what will occur all of the time. These folk are setting themselves up for disaster, as there will unavoidably be a time when they will make a screw up. And, with no variety in their trades, they're going to lose everything they've worked so conscientiously to gain.
The key to choosing a market isn't to look for one you seem to understand better than the others. That will always be something of an illusion. But there is one market you can always depend on: the one that is moving. You know you should buy when the market goes up and sell when the market goes down. A moving market will always be profitable, even if you've never traded a single share there before.
Pay close attention to trendlines, both in the markets where you're already trading and the markets you're considering. If one of your markets is consistently choppy or just moving sideways, get out of it and move on to another. If you think of successful trading as sticking not with a market but with a trend, no matter which market it's in, then you're thinking successfully.
The key, of course, is that you have to keep an eye on markets where you aren't currently trading. Keeping up with your options is just as important as watching what you're familiar with. This is where research and experience come into play. Getting to know a number of markets (and how to find out about them) takes time. But don't let that discourage you. Also, don't feel like you have to understand every option at the very beginning. Pick a few different markets to actually trade in, but also choose a few just to watch. That way, you'll see how your own trades work, and you can also compare that activity to markets you may not know much about (yet).
The only way to learn about which markets are right and wrong for you is to watch them. Watching a variety of markets will give you the knowledge you'll need to use when it's time to change gears and find that elusive moving trend.
Think about trading mistakes like driving an auto on icy roads : if you know that driving on ice is threatening, you can avoid traveling in a snow typhoon. But if you do not know about the hazards of ice, you could drive as though there were no threat, only realizing your mistake once you are already off the road.
Too many traders are fixed on only one market. They may trade only the foreign exchange Greenbacks / EUR, or the E-mini Russell, or the E-mini DJX , or merely certain stocks, and so on. While they may feel a certain sense of expertise or mastery over this one market, nobody, regardless of how experienced they are can foretell what will occur all of the time. These folk are setting themselves up for disaster, as there will unavoidably be a time when they will make a screw up. And, with no variety in their trades, they're going to lose everything they've worked so conscientiously to gain.
The key to choosing a market isn't to look for one you seem to understand better than the others. That will always be something of an illusion. But there is one market you can always depend on: the one that is moving. You know you should buy when the market goes up and sell when the market goes down. A moving market will always be profitable, even if you've never traded a single share there before.
Pay close attention to trendlines, both in the markets where you're already trading and the markets you're considering. If one of your markets is consistently choppy or just moving sideways, get out of it and move on to another. If you think of successful trading as sticking not with a market but with a trend, no matter which market it's in, then you're thinking successfully.
The key, of course, is that you have to keep an eye on markets where you aren't currently trading. Keeping up with your options is just as important as watching what you're familiar with. This is where research and experience come into play. Getting to know a number of markets (and how to find out about them) takes time. But don't let that discourage you. Also, don't feel like you have to understand every option at the very beginning. Pick a few different markets to actually trade in, but also choose a few just to watch. That way, you'll see how your own trades work, and you can also compare that activity to markets you may not know much about (yet).
The only way to learn about which markets are right and wrong for you is to watch them. Watching a variety of markets will give you the knowledge you'll need to use when it's time to change gears and find that elusive moving trend.
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