Proper education is the key to trading success
As your life as a trader gets rolling, be patient, be cautious, invest responsibly, blowing up your account is bad! If you blow up your account, you will lose out on future opportunities. Take it slowly, there will always be trading opportunities, so it’s important that you live to trade another day! If you’re not familiar with what blowing up your account means, it’s what happens when you make losing trades that basically wipe out the majority of your equity.
You must be educated. If you’re not educated, and don’t fully understand the risks associated with trading, you’re gambling. Don’t be a gambler trader!
The best traders really only have four different outcomes. That’s it. The outcomes are either a large win, a small win, break-even or a small loss. Keep a level head, understand that trading is a challenge, and it will never work perfectly for you. If you can do this consistently over time, your chances of being a profitable trader are very realistic. Control your emotions, manage your risk, take your profits, be patient, be successful. It seems simple right? Remember this, “Just because it’s simple, doesn’t mean it’s easy”
Top 5 reason you should start trading
You should NEVER be a slave to money, your money should be working for you. Be your own boss. Investing in stocks keeps your money working for you 24/7 – time is on your side when you invest in supreme companies.
Trading will teach you how to control your emotions. This is one of the most important aspects a trader must develop, being able to control your thoughts will allow you to make decisions with your mind, and not out of rationality. This mental power will translate into other events in life where a level head will create better outcomes rather than emotion stricken decisions.
FINANCIAL INDEPENDENCE is by far, the best reason to start trading. By working hard and developing a set of skills to garner success in the markets can bring you a life where you are in the driver’s seat.
Learning how to deal with failure is so important. Athletes can actually be really good at this; when playing sports you’re going to find yourself on the losing end at times. The GOATs of the world take their failures, learn from them, and come back even stronger.
Don’t get stuck in a 9-5 grind that makes you unhappy and allow yourself to get trapped like a rat, it’s 2020. You can trade from anywhere you have an internet connection, that means you can make a living traveling, hanging with the fam, and anywhere else you can imagine, this gives you time to live and enjoy life – time can not be bought!
90% of people who try to trade the market will fail
Why is this? Well, most people trade without any education! How do you expect to succeed at anything without practice, and a solid foundation of education? Trading without education is not a good mix. Would you do surgery if you had no education on being a surgeon? Would you fly a Boeing 747 without any flight training? There’s a lot of buttons to press in a cockpit, which ones should you push? Hopping into a trading broker loaded with money and no education would be a lot like hopping into the cockpit of a Boeing without any knowledge while trying to take off and fly successfully. Don’t crash and burn! Trading is so similar.
We’ve seen it a million times in this industry, new traders, stuffing a brokerage full of their hard earned cash – and trading it! Sometimes, beginner traders will get lucky after their first win, think it’s easy, double, triple down on their investments. This is gambling, and usually, the outcome is not good, because of the lack of experience. Emotion sets in when the trade goes the other way and the money slips away. Sometimes, the new trader has never experienced financial losses, and it can really affect them. If you don’t understand the market, and how it works in cycles, it’s hard to look into the future. Market goes up and down. It doesn’t ever go straight up, and it never goes straight down. Sure there will be steep drops and huge spikes, but the point here is that the markets go up and down, and that’s what’s consistent.
Find a strategy that works, and stick to it!
This may be the best single piece of advice in trading. There’s many different strategies, and many different ways to make money. Choosing a strategy will have a lot to do with the trader type you fall under.
The trading lifestyle
If you think the trading lifestyle will result in driving Ferraris, rocking jewel encrusted Rolex Daytonas, throwing cash around like a modern rapper with beautiful women hanging around your mansion – you probably won’t be satisfied, most definitely, not in the short term.
Remember, that time is your greatest friend when it comes to building a portfolio, and generating that second income stream that you dream about. The thought of getting rich quick, can be one of the worst thoughts you can have when trading. In fact, some of the best, most accomplished traders we know are very reserved. Sure, these great traders enjoy luxuries, but those luxuries don’t come quick, and they can afford them easily, after years of building trading accounts and income security.
It’s not about getting rich quick
Believe it or not, don’t enter trading with this idea. This is not a good thought to help mitigate risk, which is one of the most crucial aspects of trading for a living. Getting rich quick is for gamblers and lottery players, not for traders! Take a look at this image below, some might call this obvious, but it’s really important that you treat your trading career seriously. Trading is not gambling, don’t treat it like that!
Get on a proper trading routine
Here’s our trading routine that we have developed over years of working with some really great traders, who have amassed fortunes over time.
Timing will depend on the time zone you live. East coast traders can have a much different schedule than those traders on the west coast. West coasters must get up early in the morning, market opens at 6:30am PST / 9:30am EST. This gives the east coasters a little more time to prepare for trading, given the time difference of three hours.
– Wake up at 5:00AM PST
– Get out of bed, drink water and hydrate the body and brain.
– Take care of yourself, eat something healthy, do the basics. Get ready to seize the day. Carpe Diem.
– Review your trading watchlist, have a good #5b-news stream to make sure you’re on top of breaking news.
– Prepare to trade, at a desk, table, or something where you aren’t laying down, with a proper trading system #2a-equipment
– Trade the market – know when to stop – don’t over-trade.
– Catalog your trades, get a calendar you can write notes on, record your wins/losses and other trade info.
– Take a break – eat lunch – ease your mind.
– Reflect on your trading day, take notes, review your stats and Trading Plan
– Live life and enjoy the day before the final review before bed.
– Review your notes, write a plan and build a watchlist for the stocks you plan on trading.
– Go to bed early, make sure you get enough sleep to keep your brain running at full capacity.
Remember to take breaks & enjoy your time
Don’t stare at trading screens for too long, it’s not good to do that. We’ve seen it happen a lot to students, co-workers and fellow traders. This can really be too much overthinking, giving you less time to ease your mind, and prepare for the next trade.
You should be doing what you love to do when you’re not trading. Trading should not be the ONLY thing you love to do.
Things you can do to become a better trader
Knocking out these 3 simple tasks can help improve your trading results. It’s so important to have a plan of action and a routine that works for you! Make sure you’re doing all you can to become a better trader.
We bet you feel like this happens to you a lot if you have already started trading. Stop hunting is a strategy used by market makers that attempts to force traders out of their positions by driving the price down where many have stop-losses set.
We like this visual to help understand stop hunting at a basic level.
By the end of this course, we hope to keep you out of these type of traps in your trading career!
As a trader, you will receive income in one of a few ways. The most common forms of income from trading or owning stock are capital gains, and dividend.
As a trader, you really need to understand the basics of Capital Gains and especially the difference between short-term and long-term gains.
Here’s the breakdown: (Assets that are subject to capital gains include stocks, bonds, precious metals, jewelry, real estate, and property)
When you sell a capital asset for more than you paid for it is a capital gain. The tax you will have to pay on capital gains depend on how long you hold the asset.
Long-term gains are derived from capital assets that are held for more than one year, while short-term gains are a result from selling assets owned for one year or less. Short-term gains are taxed as regular income, according to the U.S. income tax brackets.
Long-term gains are unique in the way that taxes will generally be more favorable than regular income tax brackets. When it comes to taxes, there are many special rates and exceptions, so make sure to research, do your due diligence and even hire a CPA for optimal capital gains and taxation management!
Are you ready to live the life of a trader? If you are wanting to take the leap, we are here to help! To learn more about the trading lifestyle or have any questions or comments, feel free to use the contact form below to get in touch with us.