In today’s episode on Let’s Talk Stocks, we’re going to take a look at the six key reasons for what makes certain people learn to trade profitably much faster than other people.
That’s what we’re going to cover, and I hope you take some of these reasons and implement them if you’re not trading profitably. That way, you can learn to trade properly and get there much faster.
1 – Start Trading Real Money as Soon as Possible
You might say that you need to learn a lot more first. And that may be the case. You might be in the learning stage. But the sooner that you can get to trading real money, the sooner you’ll learn how to implement the actual trading strategies.
There’re some things you can’t learn until you do it.
You have to learn:
- how to double-check position
- how to enter these things correctly
- all about the emotional part
Once you’re behind the steering wheel, that’s when you start learning how to deal with those emotional concepts.
You’ll learn how to calm those emotions down and how do you take the profits and losses as they come to you. Start learning to trade real money as soon as possible. I’m not saying you have to trade millions of dollars or a huge amount right away. It might be different for every person. For you, it might be $500, that’s a lot of money. For other people, it might be $100.
For other people, it might be $50,000. Everybody’s at a different point. When you’re trading real money, you’re going to learn a lot more than just trading a paper account.
The sooner that you can get over that hurdle, the faster you’ll get to trading profitably. I’ve seen a lot of different people that stay in the trading simulations, and they never get out. It’s like you’re locked into that box. That becomes a problem and trouble, and it can hold you back in a big way.
2 – Take Calculated Risks when Trading
I’m not saying you have to jump out of an airplane without a parachute. But you have to take certain risks and trading. That’s what investment is all about. That’s what learning to trade is all about. You have to learn and understand a certain trade is something worthwhile. Eventually, you’ll learn that certain trades are just bad trades.
And other trades might be more favorable for you, for your risk tolerance and your personality. That’s what makes them a lot better. In that case, you have to learn to take these types of risks. You have to learn what risks are more favorable to you. Not every risk and trade is a good trade for you.
Everybody has a different type of trading style and risk tolerance. You have a different size of accounts and different goals. You’re in different stages of your life. It may not be the best thing, and sometimes maybe you’re taking care of a sick loved one. Maybe your mom or dad got cancer, and your focus is on them. All of a sudden, it might be a good decision to take a break from trading.
In that case, that’s a risk you don’t want to incur because your focus is split. Learning to take calculated risks and taking those risks is an important part of trading. And it’s something that a lot of very successful traders learn to do early on. It’s equally important to know when do you take the risk, and when do you not take risks.
3 – Get Trading Coach, Mentor or join a Group Early
Here’s a quick little story for you.
I have a handful of trading students where I work with them. I coach and mentor them. Also, we chat and do group discussions.
And a lot of times I find out that people think that they need to be much better to have a trading coach. They think that they need to be much better to have a mentor or to join a group. However, that’s not the case.
The case is you’re going to learn much more, and it’s going to put you on the right path if you get a trading coach or mentor much earlier on. A coach and mentor are the two different things. And that’s beyond the scope of this video. But if you have someone that you can work with one-on-one much sooner, they can give you a breakdown of the list of videos you should watch.
Or the list of books. And then after a couple of weeks, you might chat to clear some things. That is what I’m doing with my students.
Then we might go over strategies, and that saves people a lot of time. What a lot of people don’t get is that they think you have to learn so much more knowledge and information before you get a trading coach. The reality is that a coach early on can save you a lot of time, energy, and money.
He will save you from going in the wrong direction. He’ll show you the bigger picture and show you the bigger perspective specifically for you and for your needs. And even if that coach doesn’t do the day trading and they might focus more on option trading, they can still show you the different perspectives. He can show you something you may want to take a look at because they might have seen different things. And they might have tried different things, and they can open up your mind and eyes.
It doesn’t matter who you get your coach with, whether it’s me or somebody else. The important part is to find someone that works for you and with you to create a plan and strategy that’s suitable for you and your risk tolerance.
I’m not saying you have to go and deal with sessions with me. All I’m saying is that you need somebody that gets a coaching session and works with people and a group of people early on. Trying to do it on your own will cost you a lot of money, energy and time.
4 – Trade Small, but Trade often
You want to put a lot of trades on. As many trades as possible. Think of it like ants. There’s a bunch of ants. So you want to put a lot of different trades on, but trade small.
That way, you’ll learn from those trades. As you learn which trades are more successful, then at that point, you can trade a little bigger for the different types of trades.
Certain trades you’ll still probably keep small because they’re new trades or you’re investigating those trades. You see, if they work out for you or they don’t. In either way, trade often. If you trade often, but you trade small, it allows you to work at things and build things up.
5 – Try new Things and Adjust when Trading
If you’re focused on penny stocks, that’s fine. But you’re not opening yourself up to the other perspective. Always think that this might be good, but something else could open up your world. Especially if you’re new.
It’s different if you’ve been trading for a while. But if you’re brand new and you haven’t tried different things, then it could be a problem.
I’m not saying you always have to hop around the new things. Because sometimes you get the opposite spectrum where people are just constantly hopping around from one thing to the next. And they’re back to the other thing. Then they’re going around trying all kinds of new things. That way, they never find what works for them. That’s also a big problem. But you have to try at least new things to open yourself up.
Don’t be closed-minded and say this is the way, this is what I want to do. The main reason is that there might be something better that’s suited for you. That’s the case, especially if you’ve been trading less than a year or two. There might be some new things that your mind needs to be opened up to. And sometimes coach or mentor can do that.
Trying new things like a new pasta dish, new meat dish, and a different way of cooking can be even better than before. Try new things and then make adjustments to them. Continue to get them better. And you’ll have few core trading strategies, and then you’ll dabble and try a couple of other things here and there to see what else works for you.
Maybe this works for you, or perhaps it doesn’t work for you. And then you might pass on those and come back and revisit those ideas and concepts. Don’t be scared to try new things, but do it lightly with a small amount of capital.
6 – Keep Learning & Improve Your Trading Skills
Learn as much as possible and continue to learn. Some people learn a little bit, they get a handful of things, and then they stop learning. They say that’s enough; I don’t want to learn anymore. Or they become bored.
Even if it’s just spending a couple of hours a month talking to a coach or a trading group is a great idea. Talking to other traders and seminars once every couple of months is also a smart thing to do. It will open up your mind a little bit more. Continue to learn. Learn as much as possible, and keep learning. These are the things that allow you to keep evolving and opening up your mind to some new things.
The Process of Becoming Successful Trader
People that do these six things that I’ve shared with you learn to trade very quickly and profitably. That’s because all these things are combinations for the right recipe to evolving you as a trader.
You’ve got to do things. You can’t always learn from a book. If you’re trying to do photography, you have to go and take photos. You have to take some pictures and use a real camera.
You have to use real physical equipment. You have to go out and continue to learn and evolve and try new things and new poses. If you’re doing photography for wedding couples, you might do your core poses, but you try one or two other new things. And you see what works and what doesn’t. That’s what makes a great photographer.
And the same thing is if you’re doing trading. There is no difference.
You need to push yourself to try new things, to trade often, but trade small.
Keep learning, find a mentor, a coach, or a trading buddy. All these things help evolve you to the next stage and the next level.