As Ray Barros  is travelling DownUnder, partly to visit his ailing mother,  he has asked me to help out with a blog for today.

 I  think his students of Habits of Success webinar may appreciate the following  topic:

 To be a successful trader

As traders, whether a newbie or advance , we have this question    of how to be  a successful trader, running in our mind  constantly.  To become  successful , we also  need to be consistent in our routines.

Trading is more art than science. There  is  also talent involved. The best traders hone their skills through practice and discipline. They perform self analysis to see what drives their trades and learn how to keep fear and greed out of the equation.   

As a trader and  student of my mentor Ray Barros,  I would like to recap the steps that all good traders take in order to become successful.  They are basically the steps all good teachers teach as well.

1.Plan and define your goals

It is imperative that you have clear goals in mind as to what you would like to achieve. You then make sure that your trading method is capable of achieving these goals. Each type of trading style requires a different approach and a different risk profile . A personality mismatch will lead to stress and   failure..

2.Choose a good Broker

Choosing a reputable broker is important  and spending time researching the brokers will be very helpful. You must know each broker.   A good broker with a poor platform, or a good platform with a poor broker, can be a problem.  Get the best of both.

3..Choose A Methodology

You must know what you will need to make the appropriate decision about whether to enter or exit a trade. Some people choose to look at the  fundamentals of the company or economy, and then use a chart to determine the best time to execute the trade. Others will only use charts or technical analysis to time a trade. Whichever methodology you choose,  be consistent. Your system should keep up with the changing dynamics of a market.

4. Timing In Sync

Many traders get confused because of conflicting information  when looking at charts in different time frames. What shows up as a buying opportunity on a weekly chart could, in fact, show up as a sell signal on an intraday chart. In other words, if the weekly chart is giving you a buy signal, wait until the daily chart also confirms a buy signal. Keep your timing in sync.

5. Your Expectancy Ratio

Expectancy is the formula you use to determine how reliable your system is. You should go back in time and measure all your trades that were winners versus all your trades that were losers. Then determine how profitable your winning trades were versus how much your losing trades. Students of Ray Barros are familiar with his Expectancy Formula Ratio.

6. Focus

Once you have funded your account, you must remember  that your money is at risk. Therefore, your money should not be needed for living or to pay bills . This will psychologically prepare you to accept small losses, which is key to managing your risk. By focusing on your trades and accepting small losses, you will be much more successful. Secondly, your  leverage should  not exceed a risk of 2% of your total funds. In other words, if you have $10,000 in your trading account, never let any trade lose more than 2% of the account value, or $200.  Decrease the leverage by moving yours stops to not more than 2% of losses to be incurred.

7. Feedback

A positive feedback loop is created with a well-executed trade in accordance with your plan. When you plan a trade and then execute it well, by trading your plan, you form a positive feedback pattern.

8. Weekend Analysis

During weekends and  when the markets are closed, study weekly charts to look for patterns or news  in the pipeline.   Wait for your setups and learn to be patient. If the market does not reach your point of entry, learn to sit on your hands. If you miss a trade, there will always be another. If you have patience and discipline you can become a good trader.

9.Record-keeping

Keeping a printed record is  a learning tool.  Print out a chart and list all the reasons for the trade, and  the fundamentals that sway your decisions. Mark the chart with your entry and your exit points.  Note all your feelings on your record. You will develop the mental control and discipline to execute according to a  system instead of your habits.

Hope the above steps  will serve as a reminder to all levels of traders on how to be successful as we tend to lapse with the passage of time.

Ana aka Idkit

Ag Moderator

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