By Darrell Martin
This final part of this series will present the last of these tips to help you when you are trading.
Have you ever had someone tell you that you are not really trading, but gambling? There is a difference and if you know the difference, you won’t make the mistake that could cause you to fail.
Gambling is not having a system or strategy. It is when you take a trade based on your gut feeling, the price or the return potential only. If you listen to people who do not know how to trade and do what they say, then you are gambling.
It is when you just jump in and throw away live money on things you are testing out without demo trading first. Gambling is also when you trade too big after a winning streak. Then there’s things that may not feel like you are gambling, but you really are:
Not having live data Not using volume and the proper indicators to help you plot your trades Using random online charts Relying on delayed data. You need live data.
Read the disclaimers on the websites. Are they live or not necessarily live?
Having No Social Interaction is another thing that causes traders to fail. It can be very lonely if you are trading in a box. You can come up with many false assumptions about who hosed you and who was working against you.
You have to be willing to get in the chat rooms, ask questions and put yourself on the line. You may have to be willing to be wrong and say, “I think this is what happened. Am I right?” If you’re wrong and you are called out, you can become a much better trader. Eliminate the false assumptions and improve your trading.
Thinking That You Know It All limits your ability to learn. If you have the attitude that you are still learning, you will be able to still learn. If you’re in the chat room, you’ll improve by helping others. By all means, share what you do know! You have to be able to train others, but don’t think that you know it all.
When you are Trading Out Of Need, you should not be trading. This happens when you say, “I really need to make $500 this week.” At that point, you will be trading based on emotional decisions. If you really need to make $500 this week, work some overtime at you job, or find another way to make that additional money.
Sometimes traders are just looking for rules. They don’t really want to learn to trade, but it is imperative that you Invest The Time To Learn So You Are Not Throwing Away Money.
Think about where you want to be in 12 months not 12 days. If you are only thinking about where you will be in 12 days, you’ll blow your account out. Invest in some education, every profession has to invest in their education.
Traders need to do that, too. Be sure that while learning, you don’t start Trading Live Too Soon. Again, make sure that you have tried your strategies and systems out on demo and can do them well before switching to live.
You know that Greed is overtaking you when you don’t want to take the time to learn. Or you don’t want to take the time to set things up; you want someone else to do that for you because you just want to be trading.
You have to keep your greed in check or it can cause you to make faulty decisions like Not Knowing When To Stop For The Day. Your greed could drive you to try just one more trade to make up for that big loss. Greed might make you feel that you’ve had such an amazing day that nothing could go wrong and you end up giving it all back. Proper risk management is always the key to keeping your account. Follow the 5 percent rule that we have mentioned before.
You need to Survive. Preserve your account by using good risk management. Always trade with risk capital and not the rent money. “Scared” money has the tendency to disappear really, really fast! You don’t want to compound your losses by losing money that was needed to survive.
As you have heard many times, only trade with money you can afford to lose.
A great learning tool is to use a Trade Journal. In this journal, record each of the trades you do. If this journal is one that you keep online, you could enter in screenshots of your charts complete with marks of where you entered, exited and for how much.
Record what you did right or what you did wrong. If you don’t know, ask someone so that you can learn from your mistakes. This is a great way to learn from your trading.
This series has touched on several ways to help you in your trading. Hopefully, each of the articles has given you things to think about or work on to become a better trader. Whether you are a part time trader or a professional trader, there is always things to learn.
To see what courses are offered at Apex Investing Institute, go to www.apexinvesting.com. Apex Investing Institute offers free education, and free access to the Nadex Binary and Spread Scanner Analyzers. Member traders are invited to trade in the chat rooms, take advantage of trade signal services, use key indicators and access the Apex Forum. The forum content is updated daily and includes over 10,000 members. In a supportive learning community of seasoned as well as up and coming traders, traders of all levels learn how to trade Nadex binaries and spreads in depth, as well as futures, forex, stock and options, and gain an edge for successful trading overall.