The Keys to Successful Trading

Making money is one thing, managing it is another. One form of money management is through investing and trading money. People who are entrepreneurs are different in almost every aspect than other people; entrepreneurs not only make money differently, but once they make it, they keep seeking ways to make even more of it. They do it because they know it’s possible. Entrepreneurship is all about finding opportunities everywhere possible.

When I make money with websites or with businesses, I don’t just keep it in the bank like most people do. Banks offer possibly the lowest interest rates possible. I invest and trade till the last penny. Learning related skills will come in handy. Since trading money has more benefits than leaving money in the bank, it also carries more risk.

If you aren’t the type of person who runs away when they hear the word ‘risk’ and you are still reading, congratulations! You are a step closer to success.

I have read over 20 books on the subject of trading in the last years, and I have also tested more strategies than I care to admit. Here are very briefly the conclusions that my years of trading brought to me. I will try in the future to expand most of these points to truly share my experience.

Educate Yourself. I started trading like everyone else; just buying and selling stocks before studying anything, thinking I knew more than most. You will quickly realize than knowing a little more than most will just make you lose less money than most, not win money. You need an incredible amount of knowledge to make money in trading, so go ahead and absorb as much information as possible.

Define Goals. You need to know what you want before you know where you’re going. Put real numbers on the table. I had a friend who told me he made like $3000 last year and was happy. When I asked him how much money he was trading with, he told me $75000. I calculated and replied that it’s just a 4% gain, and that he’s better leaving that money in the bank because it carries no risk at all compared to trading. Unless you put real numbers, you will be doing some foolish things like my friend.

Have Clear Systems. Whether you trade with fundamental analysis or technical analysis, you have to leave guessing alone. Before you even start trading, you need to know how you will react giving any eventuality. In case of doubt, retract. If you don’t know what to do and still act on it, you will be a loser no matter what happens. Situation one, you will lose money, and that’s the end of the story. Situation two, you will win money, and you will think you are good or learned something; confusing skill with luck is the worst thing that could happen to you.

No matter what you do, SURVIVE! In trading, you always have the opportunity to make money and retry… as long as you’re still playing. Never risk money that will put you in a position of not being able to trade again. Trading is an ever learning journey where new chances come and go. You need to try all of these situations for you to become a better trader in the future, so it’s not just about making money now. If you want to experience it, you need to preserve capital. Do not lose your cool when you lose money and then risk even more. You WILL have new opportunities in the near future, just be patient and remember to always stay in the game.