The 5 Stages to Becoming a Profitable Trader-
Trading for a living is not very common among the traders. It is very rare that traders begin their careers as traders. Usually, people become interested in trading when trapped in a regular 9 to 5 job and start looking for ways to live independently and financially free. But becoming a professional trader when you spend 40 hours of work every week, caring for a family, paying a mortgage and enjoy your hobbies is often an impossible task.
Trading For a Living
Trading for a living can be done when you can use the time you can sacrifice for your trade more effectively to have a chance to become profitable in this business. The Bureau of Labor Statistics reports that in 2013, the average adult employees spent 2.8 hours a day watching television. If you invest the time to work on your bargaining skills, you can significantly improve your trading time. Ask yourself what will have a greater impact on the future of his life: to see the football game or reality show cooking or working for 2 hours in your negotiation skills. In this article we will share with you some tips and concepts about how to become a profitable trader while working from 9 to 5.
8 Rules to become a profitable trader
Rule 1: Find an approach that suits your lifestyle
First rule in trading for a living is to get a suitable trading approach. It’s not about whether you should use a particular indicator, trade on price action or become a fundamental trader, but finding a trading approach most important that suits your lifestyle and fits your daily life as a trader. Its your location that will determine which sessions you can trade during the waking hours, and with your trading style you can find the best of your personal life.
Although you can not change much of your time zone, you will always be able to find an open and active market that you can trade. For example, if you live in Europe and leave the office at 5 pm, the New York Stock Exchange is still open and you could negotiate the active session New York nights. And if you live somewhere in Southeast Asia, the London session is still running when you come home from work. Of course, this also depends heavily on the markets that trade.
To get an idea, that the negotiating sessions are available throughout the world and how it fits your daily schedule, ForexFactory offers a very good tool to answer your questions.
Another factor is the type of order you use in your trade, namely, limit or market orders, and how to manage their operations. If you use limit orders, you can just plug them before leaving in the morning and let the markets do the rest. But if your trading method requires constant monitoring and has actively to manage it’s operations, then you must have to monitor the market very frequently and will have to make decisions based on the changing situation of the market.
Step # 2: Do not ride the learning curve
Although this point is true for all traders, it is worth noting here again. The so-called “jump system” is one of the main reasons why traders, even after years, still resemble fans and can not see any improvement in their trading performance. The saying that “it is not the trader but the trading strategy which is responsible for recovering profitability “is very hard, but it has more value that traders can imagine. Choose a method, master it, stick to it and do not change it! Every time you change the system, it starts as a complete novice from again and all previous months have been in vain.
Step # 3: The structure of the Day
When time is limited, managing your most valuable asset becomes even more important if you want to do Trading for a living. Traders who have a regular 9-to-5 duty, usually can squeeze in 30 to 60 minutes before going to work in the morning and two hours in the afternoon, plus a little more time in their late week. The good news is that if this time is used wisely, is enough to make significant improvements over time. Trading for a living, your daily life working as a trader might look something like this:
The night before work: One day of the trading does not start in the morning, but it starts at night before. If you plan to trade the next day, do your homework the day / night before that.
Morning before work: Wake Up, enjoy your breakfast and coffee with your family. Do not go directly to your trading platform early in the morning. Then, start your trading platform, analyze what has happened overnight in regards to news, price movements and reconcile with your trading plan: is the price moves towards the areas marked as “interesting”? Do you see an evolution of trade and configuration not enter a trade? Is there any important news ahead on the day that may affect your trading? If you have open trades, how do you handle them? Update your trading plan accordingly.
When at work: We strongly recommend not to trade from a smartphone while on the job. Although almost every broker will offer a smart phone application that lets you run and manage trading from your phone, which is a big amateur mistake to do so. The set and forget approach may be its biggest advantage over traders who see their cards throughout the day. In addition, constantly checking his cards will distract you from your real work. Although their ultimate goal is to leave your job, you probably have to stay a little longer …
In the afternoon: When you get home at 6 pm, take the time to dine with your family and relax a little after a day of work. Do not go directly to your charts. How do you spend your night time trading depends on you previous trading plan. Check what is happening in your charts and trades. Do make decision based on the charts movement nit by your mind. If you choose to actively trade a few hours of a single trading session, first goes through all its instruments and talk to your trading plan what has happened during the day, the news will be released. Avoid flipping endlessly through charts, because it distracts your attention and waste time. If you found an instrument that looks “interesting” and could generate an income, write it on a separate and keep it in front of you list.
Before the end of your trading day: After you have finished trading for the day, you have to update your trading journal and write down the trading took during the day. Not having a diary recording of the trading is one of the biggest mistakes a trader can make and a sure sign that you are not taking seriously the trade (if you hear yourself saying, “I do not need a magazine” that you need it more than anyone else).
Finally, it is necessary to update your trading plan with things that happened during the day, go through all your instruments again and consider what you might expect for the next day, and things that would point specifically. Plan your trades last night, see your cards in the morning to see if the configurations identified played outside and not from your smartphone traded at work. Your trading plan and diary will be the most valuable tools. If you can not combine your work, family, hobbies and trade, a notebook is achieved and schedule your specific trading time.
Rule 4: Establish a trading plan
The purpose of a trading plan is to avoid the unpleasant flipping through-Ranking deadlines habit of most traders delivered. How many times you have lost good trading opportunity because they were not paying attention or you forgot the trading rule that you previously identified? Having a trading plan, while still being worked is especially important because when you get charts at the afternoon you might have forgotten what their trading ideas that you made in the morning, or the settings that had been lurking. Now only you can take a look at your trading plan and continue where you left off.
The trading plan is necessary if you are planning for trading for a living
Trading for Living is the most important uncertain decisions you are going to make if you do not have any trading plan. Before you start playing your money with the charts you need to make sure that you are worthy enough to make battle with the market.
While you are on trading, keep this things in your mind.
- Forget that the money is involved in trading.
- You are trading because you love to trade and do this as your best hobby.
- Stop counting on how much profit or loss you made while trading.
- Focus on just trading good.
In trading, If you can detect an interesting development in the plan that could generate a trading opportunity, write it down so you can return to it and check how things are playing out. Better yet, make a list of things that have to happen before it will enter a trade in a specific instrument, and that things cancel a potential trade.
So just keep this things in you mind while you are on trading based on your trading plan.
- A plan on how you are entering a trade and how you are closing a trade.
- A risk plan of each of your trading.
- What are the conditions that will make you convinced to deviate you from the existing plan.
- Set your TP and SL based on the market conditions, news, sentiments and all other X factors.
Every morning and evening returning to the trading plan and analyze what happened during the time you were absent and if any of the possible configurations assigned out is now ready for you to make a trade. If you see new potential changing settings or configurations identified before it was canceled, you will have to update your trading plan as well. This may seem a lot of work, but the structuring the trading focus wisely will eliminate time spending on charts and you will get better daily business performance that will increase your profit potential significantly.
Rule 5: Keep your own trading Journal
Along with a trading plan, a trading journal is almost a guarantee for a significant improvement in the performance of your trade, even if you can not see your cards all day. Your dream of trading for a living can not be done without it. The purpose of a trading journal is to analyze the performance of your trade and patterns of spots on your trade that will help eliminate the losing trading behavior, to learn better your trade-alter-ego and avoid losing trades.
In your trading journal, you should record all trades that you took, but not just write things like the price of each trade, if it was a winning trading or not and how much you won. Recording of the following will give you the most out of your trading journal:
Risk: reward ratio, the amount of price pips went against you, whether or not you violated the rules of trade, was optimal entry, which could have done better in regard to the management of trade and what were his emotions before, during and after the trade …in short i can tell that the exact reason of entering and exiting from a trade.
Ideally, you record all the information right when you enter a trade, but it’s ok to do so once you are done with your trading day too. That’s an important factor in trading for a living. Just schedule 30 minutes after you’re done trading and record everything in your trading journal. You can easily judge how serious you are about replacing your current job with trading by the effort you make to have a trading journal.
Rule 6: How badly do you want it?
Whenever aspirants and candidates talking to traders who will tell you that you are really passionate about trading for a living and want to stop working and live financially free and independent and do want to do full time Forex Trading. The truth is that 98% of all aspiring traders who will meet on your journey will quit and never be able to live in their trade – it is likely that many people give up and stop trading now. ..
It is easy to judge the severity of a trader is about your goals asking 4 simple questions:
– Do you have a trading journal?
– Do you have a trading plan?
– Analyzes the previous trading to detect possible weaknesses?
– When was the last time you changed your trading system?
You may want to replace the ‘you’ with ‘I’ and after these 4 questions next to your trading table. Do not just say, “I want it to be very bad in trading”, take action and make an honest self-check. If you are just playing hoping to stumble upon the Holy Grail, which could also use their time in a better way. And if you hear yourself saying, “I do not need a newspaper, a trading plan or an assessment of previous trading” needs it more than anyone …
Rule 7: spend less for more
Traders think only one-dimensional and are always looking for the fastest way to make a million dollars, while trade could live much faster, approaching the problem from all angles.
If you want to have more, spend less.
This does not mean you have to live like a monk and renounce all the things you like, but being aware of how you spend your money. You will not read this too often since the industry retail is based on the premise that trade allows you to earn an easy six figure income, trade in exotic beaches and five star hotels, while Ferrari is parked outside with his girlfriend model waits inside super-. Who likes to talk about reducing expenses anyway! But do not be ignorant and start thinking outside the box: you can live outside their trade much faster if you find ways to reduce unnecessary spending (you can always happen again later, when the performance of their trade permits ).
Having your daily Starbucks coffee, smoking a pack of cigarettes a day and a beer after work can amount to $ 4,000 a year alone. Again, this is not a recommendation to avoid all pleasures, but an impulse to awaken their awareness for conscious expense and deal with their goal of living of their trade from all possible angles. These 3 ways to reduce your expenses are a good way to start thinking differently.
Rule 8: Build Your Account slowly and be patient
The good news is that the markets are going to be here tomorrow, next year and in 5 years from now, so no need to worry or hurry. Moreover, having a job gives you the luxury of slowly build a trading account, as you do not get money to pay your living expenses. With the money you save from the previous step, you can add regularly to your trading account and therefore gradually build a healthy trade account.
If you can not be profitable, adding to your trading account will not help. First, prove that you can make money consistently before thinking about adding money.
Trading seems so easy: anyone can open a trading account within minutes, fund with your credit card and you’re ready to go. Research shows that 40% of all traders withdrew after 2 months and less than 1% may net profit of fees. Becoming a professional trader is no different than becoming a lawyer or a doctor. It is not only a highly competitive field, but also requires a variety of different skills that a trader has to develop over years. Therefore, we can give you the last important advice now: do not look for shortcuts – They do not exist in trade.
Trading for a living : The bottom line
- Do use the money for trading you need to do in order to cover your living expenses
- Your time zone, your trading style, markets that trade and how to manage your trading are factors that determine how you can combine your daily life and trading life
- Implement a daily routine that allows you to combine your work, friends and family, your hobbies and trade
- Get a trading plan and plan your trading in advance.
- Journaling is the easiest way to find weaknesses and improve your trading performance
- Note about how you spend your money: If you spend less, you have to earn less
- Build your trading account slowly