Over the years, many people have asked me the secret of my success in trading. I told them, “The secret to successful trading is no secret at all.”
Successful trading boils down to a few fundamentals and when you get these fundamentals right, you are on your way to becoming a successful trader. Similar to baking a cake as I always say. If you know the exact ingredients, portions, and sequence to bake a fabulous cake, you will get it right every time just by following the fundamentals.
In this blog article, I will share some of my fundamentals, NOT secrets to successful trading.
- Trade Small
Most traders like to trade big lot sizes to boost their ego. They let their ego do the trading. As such, most of them end up as failures in the trading universe. Many are just too greedy and too impatient. They want fast and big wins to feed their ego and they treat the market as a casino more than a trading field.
I have always seen trading as a marathon, not a sprint as most would people see it. As a marathoner, you need to conserve your energy to complete the race while in the race. Therefore, with this mindset as a trader, you need to conserve your capital to stay in the trade long enough till you make the profit.
- Trade Often
In my trading career, I have come across some traders who only trade the market 2 or 3 times a year. To them, they want to be very sure that their trades will turn in a profit. They cannot afford a loss after all the time and effort they have put into their analysis. Nothing is certain and guaranteed in trading. But most traders think otherwise. They must be right. This is where they are wrong.
Trading is all about probability and expectancy and you need hundreds of trades to measure them. Nothing can be further from this truth. Trading 2 or 3 times a year is a total waste of time as you cannot measure your trade performance for improvement. Also, how much can you make in those 2 or 3 trades?
- Have an Unconventional Strategy
As I observe, most traders who fail to make money from the market have one thing in common. They follow the rules of the market. This is where they went wrong from the start.
We choose to follow the path less traveled. Our decision to deviate from the norm of the market has made all the difference in our trading results that is probably second to none.
- Stay the Course
Most failing traders are like butterflies. They fly from one strategy to another at the split of a second. They follow whatever is new in the market touted by those “market gurus” who have yet to turn in a profit themselves. What can you learn from them? What can they teach you to succeed as a trader?
Staying the course is critical to becoming a successful trader and investor. Just ask John C Bogle or Warren Buffett.
- Let Your Profits Do the Talking
In the final analysis, trading is about making the money. Not what you know. Profitable traders do not conduct classes for a fee or free preview to “show-off” their strategies. Do you see Warren Buffett or George Soros doing so? They just let their profits do the talking. Period.
These are my 5 fundamentals that have been the backbone of our success in the FX trading universe. When you can digest and implement them in your trading career. I believe that day will be your turnaround day in your trading career.
Profitable trading to you.
Founder & CEO, ALGOINSIGHTS PTE LTD