Learning to trade is like any other skill.
It seems simple on the surface…
But it isn’t easy in the slightest.
It takes tons of practice to get good. You’ve got to put in the hours, day in and day out.
That said, practicing on its own isn’t enough.
So today, I want to go over some ways you can get better at trading and hopefully pull in more moolah.
1. Clear Your Head and Focus
One of the biggest mistakes traders make is going into the markets without a clear head.
Remember, the market is cold and calculating. If you let any emotions seep into your trades, you’re risking losses. Just one emotional trade of sufficient size could blow up your whole account.
And that isn’t fun. Take it from me.
Each day, before you sit down to trade, take a minute to clear your head. Meditate, breathe deeply, maybe take a walk — whatever brings you to the present moment and helps you focus.
If you’ve got some strong emotions that won’t go away — maybe you just watched your favorite team lose — and you can’t get focused on trading, skip it for the day. It’s better to sit out for a day that it is to potentially ruin your trading account.
2. Practice With Some Paper Trades
Alright, I know I said practicing isn’t enough.
But I have to mention it again because it underpins everything else you do.
See, practice makes perfect. You can do all the studying, learning, mind-clearing, and so on…
But if you don’t practice, you’re not going to get better.
That said, you can’t just practice whatever you want willy-nilly.
You need focused practice. In other words, practicing particular trading activities.
For example, you might try picking out entry points in your demo account. You can do this several times until you pick up the right price levels to place your entry point.
Now, practice is most important when you’re a newer trader.
That said, learning is a lifelong journey. There’s always room for more practice for experienced traders. You can try new things and practice your skills risk-free and stress-free with a paper trading account.
Then, if a new technique proves to be profitable with your fake money, you can try implementing it into your real account’s strategy.
Oh, one other thing: practicing helps you learn what not to do. It engrains your strategy in your head, so you learn not to trade on emotions or because you “feel” you should be doing more ”work.”
3. Track and Review Your Trades
Keeping track of trade performance helps you see what worked and what hasn’t — and it also lets you watch yourself grow as a trader. You can identify patterns in your trading, find common areas where you make mistakes, and fix those for more future profits.
So monitor every trade you make. Take screenshots of your entry points, targets, stop-loss levels, and so on. Keep track of any notes you make on these trades, too.
That way, you can flip back to these trades and grasp what you were thinking at that time.
You should review your trades regularly. Find an interval that works for you — for example, if you day trade, consider reviewing your trades weekly or monthly.
4. Only Trade What You Can Afford to Lose
You’ve heard it plenty of times — don’t trade with money you can’t afford to lose.
It’s not just that you could put yourself into financial turmoil should the trade go wrong…
But that you’re more likely to.
Why is that?
Well, emotions. When you have too much money on the line, you get emotionally involved.
And rightfully so. You don’t want to lose it!
But you could quickly make some rash decisions that blow up your trading account and leave you penniless.
The other day, I wrote a piece about why the slow path to wealth is better. Basically, too many people give up health for wealth.
You don’t need to do that, especially if you have a stable financial situation. You don’t have to trade way more than you can afford and risk your own mental health — and risk losing it all.
Take your trades as slow as you need to, using only money you don’t care to lose. It’s better for your health and your wallet.
5. Stick to a Strategy
Lastly, and perhaps most importantly (besides learning), is to stick to a strategy.
Too many traders fall victim to shiny object syndrome. They struggle with sticking to a strategy because it’s boring.
But that’s the mindset shift you need to make.
Trading SHOULD be boring.
The strategy should do most of the work for you, telling you about when to enter and exit trades.
Think about it.
If you could make, say, a reliable $4,000-5,000/month in 1-2 hours of trading a day…
Would you even care that it’s boring?
Speaking of “boring” trading strategies:
My own strategy is pretty damn dull. It takes me all of 1 hour a week to set my trades.
But guess what? I have plenty of time to hang out with my wife, head down to the golf course, or try out a new restaurant.
By the way, I teach my strategy and more inside my BEP membership group.
Click here to learn how to become a member.
Now get out there and try out some of these tips. I wish you continued success in trading!