5 Proven Steps To Doing Really Well In Trading

Hi. Have you ever wondered what it takes to do really well in trading or what necessary steps you need to do? I keep receiving these questions quite often. So let me give you my five proven steps. I’ve been doing really well with them in my own trading, so I believe they can help you too.

Step #1: Questions
You may or may not like it, but successful trading is about the ability to come up with new, fresh ideas. Fortunately, it’s not as difficult as it sounds. All you need to do is to keep asking this question: “What happens if… ?” What happens if I buy when the RSI indicator is overbought instead of oversold? What happens if I start moving my stop-loss according to my moving average? By asking the “What happens if… ?” question constantly, you start to move forward really fast and I can guarantee you some of your ideas will be sooner or later really big winners.

Step #2: Robustness testing
Most strategies are crap. That’s the fact. But how do you know which ones aren’t? You can always find it out through extensive robustness testing. What does it mean? In my case it mainly means three things: A) A good strategy can easily adjust to changing market conditions. An extensive walk-forward testing is needed at this stage. B) A good strategy performs reasonably well in other markets. C) A good strategy has been developed only on a part of all your historical data and performs well on the rest. To be very honest with you, about 95% of all my strategies never pass my robustness testing criteria, but when they do, it’s time to move to the next step.

Step #3: Portfolio
One strategy will help you learn, but a portfolio of strategies will help you grow. You don’t need to have a big portfolio at the beginning, but even three strategies are much better than just a single one. Remember, if you want a smooth equity and a steady income from your trading as soon as possible, the only way is through diversification and portfolio. Very few people are aware of this and even fewer spend significant time by modeling different portfolios. I personally spend a lot of time trying to find out the best way to combine my strategies together to make a really good portfolio.

Step #4: Position sizing
Let me ask you a question: Do you want to make it big or do you want to stay small? Because if you want to make it really big, then you need to start seriously thinking about position sizing. This topic can be pretty complex, but it can be also extremely rewarding. So, where do you start? I highly suggest reading Van Tharp’s book “The Definitive Guide to Position Sizing.” You will learn a lot. Personally, it has moved my trading to a whole new level.

Step #5: Persistence
Listen, it can be done. It doesn’t matter what education you have, how old you are, or even how confident you feel at this moment. I’ve seen many people succeed. I’ve seen traders making it from zero to quite a nice living, and that’s why I believe that you can do it too. Yes, it does take some time, effort and learning, but once you’re finally there, it’s all worth it. So, stay persistent and mainly never give up, and that’s really all.

Important Basics To Check When Trading Online Securities

Online securities trading can be very rewarding when done in the right way. When interested in this kind of investment, you would need to select a good trading platform that makes the process easy for you. You are also better off getting a broker to help you with the trading depending on the kind of trader you want to be. There are so many brokers out there, most of which offer free account opening on their platforms so you can start the trading. Whether you are just a beginner in this kind of trading or you are an advanced trader, it is important to make sure that you choose the right platform and brokerage for your trading and below are the most important basics that should matter when making your decision.

Types of securities

It is only wise to begin by finding out what securities, you will be able to trade in on the platform. It is best that you choose one that gives you the chance to trade in all the securities you are interested in currently or maybe interested in the near future. Shares, IPOS, futures, and options are some of the securities you can choose to trade in.

Real time quotes

There are different ways that price quotes can be pulled but if what you get is data that is not really up to date, then you will be doing very little in terms of maximizing your returns. Most web based platforms offer real time data, but Is it important to make sure that is what you really get with your trades. You may need to refresh manually, but the platform should have the right measures in place to offer real time streaming.

Alerts and watch lists

As an active trader, you will find alerts very important to your trading. The watch lists and alerts can depend on different aspects that are likely to have an impact on the trading. You therefore should select a platform that makes it possible for you to customize such alerts via text or email so you can make any decisions related to the trading.

Order execution and timing

A good trading platform should at least make it possible for you to place orders that can be executed at any given time within the trading hours or which remain good unless you cancel them. On platforms that are more advanced, you may be in a position to place limit orders with more variability so you have more control over order timings and also executions.

Kinds of orders

Placing trade orders can differ from one platform to another but you basically can place, trailing stop orders, market on close orders stop loss orders among others. A wider selection of orders could prove to be better for those just starting to get familiar with the online trading. For advanced kind of traders, then a platform that makes it possible to place conditional orders for multiple trades they set up can be great. This way, automatic executions are made possible depending on the specific triggers selected.

Trading With Enlightenment

Sure, you want to put your money into a fund that you favor. You want to make big bucks, so you have got your ear permanently tuned to the radio for any news stories that might affect your stock or portfolio. You are totally set! Nothing is gonna knock you off the band wagon. Except, your emotions!

That’s understandable too. I mean, this is your hard-earned money we’re talking about here. So, you want to see it go far and do much.

The irony here is, many trading strategies are tied up with emotional baggage. The truth is, there is no room for an emotional relationship with your current holdings. You gotta be able to let them go when they are ready to go!

Look! A open hand moves through the air quicker than a closed fist can. Don’t be fooled by the apparent false weight of the fist.

Stop chasing them tickers. To trade with enlightenment, is to come to the table with a detached mind that is free from emotional attachment. See, because if you gonna do the nasty, then there can’t be no strings attached!

Since we’re talking about being a free spirit here, did you accidentally fall in love with a certain stock? Don’t tell me that your ‘Stock Whipped’!

Many people become so hooked once they see that ticker climb! But, call it greed, call it need, call it the cactus that bleeds, they tend to tighten their grip and move to the edge of their seats! Instead of being sensible and let it go after witnessing a dynamic peak, they want to see things soar into outer space!

They are not realizing that, sure the plane will pick up speed and take off and soar into the air! But, at the end of the day, that plane must eventually land! Even on a long-haul, the chances of sustaining a regular altitude is murky. Too many factors affect flight, you see.

Especially if you’re considering a historic pattern, when a marginal threshold has been reached, you gotta let it go and let it flow. Don’t be scared to hop off that plane out of mid phreakin’ air! This might sound crazy, and it is certainly not for scared investors either! But, prudence shows us that this plane will eventually return to land.

After you have let go of a stock that has risen greatly, don’t be so damn attached to that stock. Instead, just be willing to watch it and let it go already! You are not losing out on anything here. Turn your focus on other planes that are preparing for take-off.

Many investors operate the other way around, as they attempt to maneuver a bear market. But, even if you have plans for scooping up some leftovers from the pieces that fell off the craft that crashed earlier, you should continue to remain detached. Again, you don’t have room for those emotional strings here!

To buy them low and sell them high is so overrated! Don’t get me wrong. I’m not attempting to undermine sound wisdom here, but I gotta stand on a leg of logic, a leg of faith, and a leg of whatever is strong enough to hold up the weight I want to carry!

Many stories may indeed affect the performance of a particular stock in question. But, don’t be so quick to jump or make moves. Because yeah, you may be on a plane that just lost power to the engines, but that doesn’t mean that it has lost the ability to steer! Again, put those damn emotions and fears to the side here. We don’t have room to entertain them. Because, we’re in this to make bread!

I might be holding a stock from a company who suddenly turns up in the news for having a CEO who avoided tax payments. Naturally, this might create some drag on the ticker. But, my plans are somewhat independent of the pilots so called destination. I’ll jump when we have reached a certain altitude, because I’m not gonna go down with the plane! Forget that! Yet, at the same time, when we reach a certain ceiling, I’ll jump the same! Because, again, I’m in this to make bread!

There’s a time when it is so good to ride out a stabilized stock altitude for a while. I mean, why not ride with it as long as it cruises and sits where it is? Naturally, this approach of market longevity would preserve us a few coins if not turn up a few dimes or so.

In a nutshell, all I’m saying is remove your emotions here. Trade with the currents and the tides. Ain’t no reason to hold sour apples! Be willing to toss them aside and grab a fresh one. Because the truth is, there are thousands of fish in the sea, and even the market volatility is held up by the most seemingly insignificant ticker!