Focus, Discipline and Trading Psychology
It goes without saying but to trade successfully you need to know what you're doing. Which means you need to learn how to trade so that you can recognise market patterns, know a bull move from a bear move and identify good entry and exit points?
But with trading it's much more than that. Having the technical skills just gets you a seat at the table, but applying them is a whole other ball game.
Experienced traders know that trading is a mental game. Even with the skills, if you don't manage your risk and can't manage your emotions you won't be able to trade consistently profitably. Sure you'll have runs of wins and you'll think you are 'getting there' but then you'll give back all of your wins in one loss.
That pattern will tend to repeat itself over and over again and when you're in this loop you won't be able to improve. What's worse is that the emotions you go through in this win-lose cycle will make it harder for you to analyse trade setups objectively and get in and out at the right point. You'll end up making decisions based on gut feel or adrenaline rather than considered thinking so your overall level of trading ability will probably reduce. Not where you want to be!
But this is a very common trading problem and it all comes down to discipline. Have you learnt how to trade, can you manage your risk and control your emotions. The markets move up or down so on average 50% of the time you can be right but a few wins doesn't mean you have learnt how to trade and can adapt your trading to all market conditions.
Learning to trade requires focus, practice and iteration. Most people can learn to trade if they apply themselves and are patient. The problem is most people don't apply themselves for long enough to get their strategy working. You won't learn to trade overnight (imagine taking a plumbing course and thinking you were a qualified plumber!) but it can be learnt. What's definite is if you give up before you become successful you'll never learn.
When you're learning to trade treat it like an apprenticeship. Keep a comprehensive journal of what you are doing: which markets, what you traded, what worked and what didn't work. Then review that information and study what you need to do differently to improve. If you don't know what went wrong but start trading again the next day 'hoping' it will be better then you are not learning you are just gambling.
The trading simulator is your friend here. It's the perfect tool to test your trading technique in a safe environment over and over again. You can experience different market conditions, different setups and perfect your entries and exits. The more you do it in Sim, the easier it will be to do trading live.
When you are happy on Sim then move to live but do it in a low risk way, use single contracts and if you are used to trading e-minis then move to micro e-minis. This will allow you to gain confidence in the live environment and you can ultimately increase the amount of money at risk. And keep doing the journal, when things aren't working out in live then review them, figure out the solution and go back to Sim to test it. This is the path of a successful trader. Not many people have the patience to to do this which is why so many Day Traders lose money.
The bottom line here is keep at it. Of course learning a new skill can feel uncomfortable but if you stop trying you can guarantee you won't be successful. But if you have the right approach and focus then successful trading can be within your grasp. All successful traders have put in the hard yards, you need to do that too. Not what you wanted to hear? Well maybe trading isn't for you!
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