Are you struggling to make a profit in trading and feeling frustrated with your small account? Don’t worry, many successful traders have been in your shoes before, and they eventually overcame their obstacles to become profitable. In this post, I will teach you how to conquer the common issues that prevent traders from making money and transform yourself into a successful trader.
Step 1: Determine why you are not making money
The first step is to determine why you are not making money. Instead of looking outward, you need to look inward and be willing to accept that you might have to change something about yourself. Ask yourself the following questions to figure out why you are not yet a successful trader:
- Do you have an effective trading strategy that you feel confident with? Do you know what you are looking for when you analyze charts, or are you just guessing?
- If you have a trading strategy that you’ve mastered, are you actually following it and waiting for the setups to appear, or are you entering randomly because you want to be in the market all the time?
- Do you have a structured daily trading routine that you can easily explain to other people and sound like you know what you’re doing? Or do you sound like a bumbling moron who is obviously gambling your money away?
- What type of money are you trading with? Is it ‘scared’ money that you know you shouldn’t be risking, but you are anyways?
- What is your predetermined dollar risk-per-trade threshold that you are emotionally okay with potentially losing? Do you even have one, or are you just changing your dollar-per-trade risk as you see fit?
- Are you constantly glued to your charts and obsessed with analyzing the 5-minute and other low time frames charts?
Answer these questions honestly to figure out why you are losing money and begin to put an end to it. Don’t be afraid to admit that the problem might be entirely inside of you. Once you know what is holding you back, you can start working on fixing it and transforming yourself into a successful trader.
Step 2: Create a Strategy to Overcome Your Trading Failures
Once you have identified the reasons behind your financial losses in the market, you can start creating a plan to turn yourself into a successful trader. Every trader may have different reasons for failing, but it’s crucial to identify the main factors holding you back and work on changing them. By completing the exercise in step 1, you should have a good idea of the primary obstacles preventing you from becoming a successful trader.
To give you an idea of how you can address your trading problems, here are some examples:
Example 1: If you lack the discipline to stick to an effective trading strategy, limit yourself to a maximum of three trades per week for a month. Remind yourself that giving in to emotional impulses to over-trade and constantly be in the market will prevent you from becoming a successful trader.
Example 2: If you do not have a structured daily trading routine, start writing your own “daily commentary” for your favorite markets once a day after the New York close.
Example 3: If you are addicted to lower time frames, obtain knowledge on the best time frames to trade and force yourself to stop looking at any time frame under the 1-hour mark.
Step 3: Stick to Your Plan
It’s common for unexpected events to disrupt our routines and best efforts, whether it’s in business, school, health, or trading. However, the key is not to let one unfortunate event derail your entire effort and all the progress you’ve made up to that point. The “glue” that will allow you to transform into a successful trader is not only identifying the reasons behind your failures and creating a plan to overcome them, but also sticking to that plan even after experiencing some losses.
Becoming a successful trader is a matter of developing good habits and having the necessary discipline and drive to overcome your trading problems. Most traders tend to fail for the same reasons, but successful traders have dug a little deeper, made extra effort, and had more drive to fix their trading problems. If you want to become a successful trader, make sure you try hard enough to follow a plan to eradicate your trading problems.
The Last Step…
Ultimately, the last step is all about commitment. Will you commit to altering the way you trade? In this article, I have provided you with a highly effective blueprint to address your trading issues, so the only remaining excuse is a lack of motivation, which I am attempting to remedy through this article.