The Key Elements to Succeed in The Financial Markets

BITFINEX:BTCUSD   Bitcoin / U.S. Dollar
It was expected that the main message which I tried to pass to you in the last educational post would not be so popular. I tried to talk about things which are not catchy and their effect will be shown only in time. Work hard and reach your goals. Work hard and become a profitable trader. Work hard in order to get access to new opportunities. But at the same time, I got an additional confirmation of why 90% of people fail in trading. Why «gurus» and «legends» are so popular and why the community was spoiled by pushing forward simple solutions which can make millionaires from everyone. On the other hand, not too many millionaires here, so it seems the quick and easy route, as expected, does not work.

We have to understand that the majority of people in any trading community is made out of people who don’t have an interest to become successful and change their life to the better. They want to become rich as soon as possible and, for them, sweet dreams have higher priority than hard work with real results. For those, who could get the message correctly, we will move further and in this post.
Let’s talk about the key elements which any successful trade must have.
Let’s talk about the basis of success!
Let’s try to make the clarification of what you must have for profitable trading and which tools to use.

It’s pretty simple – there are 3 key elements.

KNOWLEDGE, EXPERIENCE and TOOLS - are everything you need to succeed in the financial markets!

There are no other ways or magic tools which can bring you to success.
Only these 3 elements will become the solid basis for reaching your goals. Let’s talk about them with more details.

KNOWLEDGE - you should be very naive thinking that you can become successful without knowledge.
But it is not sufficient and you can’t stop half way: knowing just a part of what is required won’t be able to move you to the top in any field.
Knowledge is what separates novices from professionals. The level of knowledge makes the difference between failures and success.

Look around...
How many people you can find who become successful without knowledge in their field? I guess not so many.
I guess Elon Mask reached his level only because he is smart guy and he spent many hours learning something new. That’s why he holds 2 degree in physics, one in economics one in business and a PhD in energy physics. I’m sure his level of knowledge allows him to think out of box and create the things which can change the World.

Mark Zuckerberg had good knowledge in programming and it helped him to create Facebook . I want to know, could someone create something big, interesting and useful, or just reach the top without knowledge? I think we all say - it’s impossible and it will be the correct answer. An attempt to build something or reach a goal must be supported by the knowledge in that field. And it’s logically. And what is illogical then? Novice traders deciding to base their decisions on little knowledge or none at all.

Why when you start trading you decide to skip knowledge and you don’t want to waste your time and efforts on acquiring it? How are you going to become rich without the most important element?

Knowledge plays a very important role. It gives you the solid basis for your growing as a trader or investor.
Knowledge helps you to understand what you are doing and how you can reach your goals.
Knowledge allows you understand where you are right and where you made mistakes.

Knowledge helps you become better.

Day by day reading about trading, you grow as a trader. With solid knowledge you have a solid support behind you which helps you move in the right direction and reach your targets. The Real World is open for everyone who wants to improve himself and become smarter. The Internet provides tons of knowledge. You get any answer you want just by typing the question in Google . And you just need to make this step and start learning what you have to know for successful trading. When I tell you - you must work hard for become successful - think about it as you have to put all your efforts for getting new knowledge in the field where you know nothing. Everyday try to learn something new. Try to understand what you did yesterday and how it effected on you. Get knowledge from books, articles, videos, courses and become better day by day. I started 12 years ago and to this day I still invest regularly into new knowledge and I will continue to do so in the future as well.

Start each day thinking - Knowledge is Priceless! Try to spend each day a bit of time to learn something new. Find the time, put your mind to work and put efforts in learning how to read the financial markets. Even if you spend 30 minutes or one hour per day in some time you will be able to create a solid basis for the next 2 elements which you need to reach your goals.

EXPERIENCE - the 2nd element after knowledge. Probably you already know how experience helped you in your life. How it helped you to avoid mistakes or do something in the right way. Experience in all activities plays a very important role too and the same goes about trading. If you passed through some situations, there is a good chance that in the future passing through the same situation you will do things faster and better and in a correct way. Experience allows you to do things properly and in combination with knowledge it creates something really powerful. With these two elements you will know what to do and how to do it.

Let me give you a simple example:
You started trading without knowledge and you blew up your money. Which experience did you get from this? If you don’t care about knowledge and experience – then you would not have paid attention or learned any lesson from this. You would repeat again the same actions and by no surprise you will meet again with the same result.
But for those who would like to really succeed in the financial markets you should take some lessons from the previous scenario:
- you lost money because you made something wrong, analyze what that was
- you made mistakes because you did not know how to trade properly, now you know how to avoid blowing up your account if you will be in a similar situation
- if you do the same next time and change nothing, you will get the same result.

So next time, you will try something new based on your knowledge and experience, and expect a better outcome. The past experience can protect you in the future and help you to avoid mistakes. Also the past experience can help you to improve yourself in order to get better result. Knowledge will give you the ideas which you will apply in order to become better. Experience will remind you when to apply which knowledge for which particular situation. It’s a very simple example of how experience in combination with knowledge can make better results for you. But there are millions of different situations which can be useful for you and can help you to become better too. You just need to gather your priceless experience and combine it with your knowledge in order to become better.

The problems of all novice traders are:
- they don’t understand the future effects of their actions in the present
- they don’t have the necessary experience to know why not trade without stop orders or why they need to follow the proper money management strategies.

Knowledge can explain these simple things, but not all of us like to follow the theory without trying it by ourselves. Probably we must test it in order to trust it, and that’s ok it’s human. That is why personal experience plays such an important role. When I told you - work hard – I meant that you have to spend time and put efforts to combine your past experience, make your analysis, understand it, learn from it and use your newly gained experience in the future.

You can get experience from everywhere. Every trade can give you a piece of experience and it does not matter if it was a winning or losing trade. Both scenarios are good teachers. Every mistake which you made is priceless for your future. Every new market movements can give you insights on how to act in the same conditions later. Everything which can be learnt from experienced traders should be taken by you in order to grow your personal experience faster.

TOOLS – the third element, and the one which is the most popular among the novice traders. TOOLS combine everything which helps you to trade and make money in the financial markets - trading signals, trading strategies, trading robots, market overviews - all these make up the tools we use. Novice traders like to think that they only need a profitable trading strategy or profitable signals in order to start making money.

Unfortunately no. That is so far from real trading. Trading Strategies and trading signals won’t make you rich because of several reasons.

Trading signals like trading strategies are only a tool.
Can you imagine that you will become a good musician only if someone can give you a good musical instrument?
Can you imagine that you will become a good photographer only if you can buy a good photo camera?
There are many example which can be taken confirming the main idea - tools are just tools. If you don’t have the knowledge and the experience to use these tools, they will be unworkable and useless for you. That’s why the same situation we can see with novice traders, when they search for and get tools, but know nothing how to use them correctly.

Not all tools can be suitable for you and your goals.

For example, if you want to create music, probably a photo camera is not the best tool for you. If you want to build something, probably a guitar is not the best tools for this.
The same goes about the trading. If you use the wrong tools which are not suitable with your lifestyle, nature, conditions and your goals – what makes you think you will succeed?

I know good examples when traders bought trading strategies for day trading, but they could not follow them because they had to work full time every day. They broke the consistency of these trading strategies and got results which were far from expected ones.

I know examples when traders started using trading signals which were focused on long term trading and big capitals. Having small capitals and breaking the rules of proper money management – their results were not amazing either.

The same goes about traders who wanted to trade following trends, but they used range strategies or trading signals based on such strategies and all these were against the nature of the movement. These traders started having negative results and lacking the knowledge and experience they were usually pushed out of their comfort zone and this feelings further made them make more mistakes and break more rules. It’s all downhill from there.

As a result, using workable tools in wrong conditions which also don’t match your lifestyle, nature and goals is never a good idea. If you do this, you will be as close to failure as possible. Don’t be surprises if you results will be far from expected ones.

In order to understand all this, you need to have knowledge and experience. Trading signals, trading strategies, trading robots won’t make you rich if you don’t have the knowledge and the experience to use them correctly. But combining these three elements, they will give you everything you need for successful trading.

When I tell you - work hard - I mean you have to put a lot of efforts trying to find the workable tools for you. But the best variant is the one where you gained enough knowledge and experience to be able to design the tools which will match all your nature, lifestyle, conditions and goals.

In this post I tried to explain to you why knowledge, experience and tools are the main elements of successful trading in the financial markets. It won’t be possible to reach your goal having only 1 or 2 of the elements. They must work together, like the legs of a tripod, 3 parts supporting each other make the solid base together.

Working hard, you will be able to gain and control these 3 elements which will help you to reach your goal in the financial markets. If you are lazy, keep searching for trading strategies and trading signals thinking that they will make you rich.
In the next post, we will talk about - what do you need for profitable trading in the financial markets.
You will learn 5 different things which every trader must have in order to make profit in long run.

If you like my work, please support it by your LIKE.
If you have something to add, ideas, thoughts, please leave them in comments. I will be glad to discuss with you. Don’t forget to read the other posts about trading, they will help you to understand better where you are now and what you have to improve in order to start heading towards the 10% successful traders.
Comment: Guys, prove yourselves that you will be able to become profitable traders or investors. Show others that you are interested not only in posts like "Bitcoin to The Moon" and "Buy here, Sell here". You need to do it for yourself, first of all.
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Thanks for Guiding to strugglers and new Trader, It is very helpful
another great valuable post, thank you for sharing it with us !!!! :)
Thank you for the voice of reason among the noise of blinded by greed wanna be rich quick and "I know it all's" who crush into mountains of "too late" or fall of cliffs "too much too fast"
Hi, Thank you for taking the time to read these articles. It is great and very time consuming, as you mention yourself work hard;-) Can you please add in your new article, how as a beginner you think and start. And what strategies are good for a beginner to build, when operating in two different markets. I live in Europe and mainly trade the Canadian and American stocks.
Hyper85 Hyper85
@Hyper85, *write these articles
Dear sir, thanks a lot by sharing this post with us. You said " Every trade can give you a piece of experience and it does not matter if it was a winning or losing trade. Both scenarios are good teachers ". This sentence is just touch my heart. This the precious word which I ever learn. Thank, Thanks a lot. May Allah give you more knowledge. Amin
Thank very much you for this post and your other posts. At least every new trader should read this!
@DLavrov Buddy cool idea. Thank you very much, I've been following you for a long time, it's cool to do analytics
DLavrov IgorPorokh
@IgorPorokh, thank you)
Solid information like always!
I traded €uro against Experience. Lost a lot of €uro and gained a lot of Experience. :-)
But Value of €uro is decreasing and Experience is stable, so in the long run it will be worth it!
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