1. As a novice trader, one of the biggest mistakes you can make, especially after having had a number of successful trades, is thinking you know what you are doing when you actually don´t. This will be the cause of every trading error you have the potential to make.
2. It takes absolutely no skill at all to place a winning trade. It does to consistently do it.
3. Be unoriginal. Save the innovative strategies and custom indicators for when you have learned how to trade.
4. Do not judge a trade on its result. A good trade can turn out a loser. A bad trade can turn out a winner.
5. Don’t focus too much on making money in the beginning. As you are still improving, it should not be your goal to make money. It should be your goal to make good trades.
6. In trading, there is no supervisor or manager reviewing every decision before it’s made. Success, for better or worse, is totally self-dependent. This is not for everybody. Find out if it’s for you.
7. Though this site has many of its members emphasizing on technical analysis, don’t underestimate the impact of fundamentals on price action. Understanding them will increase your edge in trading.
8. Don’t overemphasize the importance of finding the best trading system. Equally important are psychology and money management.
9. Online chat rooms can be good learning tools and from time to time very entertaining, but beware of entering trades that are not part of your trading plan or trade setups that you have not studied for yourself.
10. Eliminate your mistakes. Do this on a daily basis, mistake per mistake. Eventually you will run out of mistakes to make.
Loves this, I think that the list of "things to consider" can go to hundreds.. I like all of your list, but the first one is my favorite, the markets always wakes us up when we imagine that we are the unbeatable masters .. Its always great to be humble when trading...
JazzForex
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Haha yes I agree, I actually had 18 things to begin with but I tried not to redo anything you had already covered in your excellent post. Everyone could make their own list, based on their experience and thing they learned. I love the intellectual collectivism of this website!
Bill45a
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Great post Jasper. The only thing I'd add, from my own experience, is that the psychological/emotional part played a determining role in my case. Emotional instability and/or financial desperation (meaning trading might make or break your current situation) will lead you to make hasty decisions that, in most cases, will work against you.
I learned this the hard way, the problem is not the situation you might be in, is how you react to it what makes the difference. I know its much easier said than done, but that's what changed trading from very stressful to decently successful for me.
Handle your mind and your emotions or nothing else will work. At least nothing did for me until then.
Good luck people!!
JazzForex
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Thank you for adding this valuable point. These things are sometimes difficult to talk about because as traders we like to show our confident everything-under-control side. But its true: having the right psychology is absolutely key to becoming a successful trader and its one of the most difficult things to control. I am not yet where I want to be myself with this. Its good to hear you found a way to handle the emotions / psychology effectively. No doubt you came out stronger in the end!
Technician
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We are all human, have emotions and it controls us, this is how we are created. Everyone has this problem but it varies in magnitude from one to one. I still struggle with psychology as well.
Bill45a
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Its a constant struggle and a permanent job. You can be your own worst enemy when it comes to trading.
One other point that I heard in one of the very many webinars I attended really caught my attention, and it is that when you're starting to trade FOREX, learn first how to make PIPs, money will follow after you learn to make PIPs, which translates to start trading micro-lots, the smallest possible unit your broker allows, once you get the PIPs consistently positive, then move to mini and regular lots. This will make learning to trade a whole lot cheaper... :-)
JazzForex
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Agreed 100%. That’s why I included point no. 5. The goal should not be to make money. The goal should be to make good trades. Once you have that under control, money will follow from there. That is why I never talk money in the forex chat / via private message, even when I am asked. I only talk about pips.
Bill45a
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Agree 200%... :-)
OzkOzn
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"You can be your own worst enemy when it comes to trading." this part is very valuable, thanks
G13Man
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it is true where we begins makes a difference . starting out with a small account [sub 1k], does involve a bigger risk in sizing of positions . i have taken small amounts up to 2k and did not adjust my thinking , to much risk in the size of position rather then going to a couple more positions for safety .... I have still to get over my emotions with dealing with the people here who do not understand that trading is a 9:30 to 4 :00 job , and that just because I am here now , does not mean I can help u now .