Trading Tips
In trading courses I run, here are a few questions I encourage students to think about and answer. Once they answer these objectively, I help mould them robust through a back and forth email dialogue. I thought I would share them here for the benefit of our readers:
1) Why Do You Want To Trade? The obvious answer is to “make money” but the successful trader takes this a step ahead. Are you trying to get to a profit margin that will allow you to quit your day job and trade from home? Are you retired and want to stop touching your savings to live so you want to trade to make up for that? Are you trying to create wealth with long term positions while still enjoying your career outside of the markets? When students answer this question properly, it is easy for me to guide them into the right markets, time frames, and strategies.
2) What Is Your Strategy? This one is key. you must have a detailed strategy, I tell students to be as specific as they can. In other words: When exactly do you buy and sell? How exactly do you handle stops and targets and so on? From my experience, the more you can make market speculating 100% rule based, the better you will do. Even though I tell students to be very detailed here, I always end up adding rules they did not consider
3) What Markets Will You Be Trading? This one is again very important as everybody is different. There are 4 major asset classes and many markets within them. They all have pro’s and con’s but the beauty is that a set of markets like the Futures may be perfect for one person and the Stock markets may be appropriate for someone else. By knowing someone’s goals, life style, account size, personality, and so on, it is easy to steer them in the direction of a set of markets that helps them achieve their goals in the safest and most efficient way possible. Also, within each asset class, the markets are very different. Maybe you trade the stock market and are more conservative and looking for a slower moving market, you would be well served trading the QQQQ but if you traded GOOG and BIDU, this would not work for you at all. In futures, the person that trades the DAX futures is going to be bored trading the Five Year Note futures. The point is, there is a set of markets out there for each and every person but every set of markets is certainly not for each and every person. I help customize that for people.
The goal of this piece was to get people to start asking the right questions. These simple ideas can sometimes be clouded by all the misleading marketing that exists in the world. I encourage you to ask yourself these questions and contact us at Online Trading Academy to further your trading education.
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