5 Things I Have Learned About Trading That I Think Every Trader Should Know
Jason Graystone
Founder @ Graystone Education | Host of Always Free Podcast, Private Investor, Wealth builder
When I initially got into trading, although I wasn't chasing a "get-rich-quick" result, I did have a few misconceptions it.
Reflecting on some of the fantasies I had about what trading might look like compared to the actual reality, I thought I would share what I believe are the most grounding commandments that will lead to any new trader becoming consistently profitable and able to maintain an edge in the markets.
1. Risk Management is Crucial
The importance of managing risk. I always emphasise that trading is not about winning every trade but about managing losses effectively.
A trader should never risk more than they can afford to lose on a single trade, and consistent application of risk management rules is essential for long-term success.
2. Process Over Outcome
I am an advocate for focusing on the process rather than the outcome of individual trades.
Traders should stick to a well-defined trading plan and not let emotions drive their decisions.
Success in trading comes from consistently executing a strategy with discipline rather than chasing quick profits.
3. The Importance of Backtesting
Backtesting is a key component of my approach to trading.
Before risking real money, traders should thoroughly backtest their strategies on historical data.
This helps in understanding the potential success rate and drawdown of a strategy, providing confidence and clarity when trading live.
4. Trading is a Business
Trading is a business, and traders should treat it with the same level of seriousness and professionalism.
This means having a solid plan, maintaining records, analysing performance, and continuously learning and improving.
It's not just about making trades, but about managing the entire process efficiently.
There is ALWAYS a cost of doing business.
5. Mindset and Psychology
I must stress the importance of having the right mindset and psychology for trading.
Strategy and technicals make up for probably 10-20% of successful trading. The rest is all psychology.
Emotions like fear and greed can easily derail a trader.
The need for self-discipline, emotional control, and the development of a mindset that can handle the ups and downs of trading without becoming overly reactive.
If you would like to learn more about this and you think the above points suit your personality, then you can learn more by checking our my VERY popular training video HERE
Enjoy.
JG
"Unlocking Entrepreneurial Success: Insights from the Retired State Director of Khadi & Village Industries Commission. Discover futuristic agriculture with natural farming, permaculture, and sustainable practices."
7 个月"Absolutely spot on! While strategies and technicals lay the foundation, it's the psychology that truly determines the outcome. Mastering one's mindset can transform a good trader into a great one, as it helps in navigating the emotional highs and lows of the market with discipline and resilience. Thanks for sharing this vital insight!"