The Process of Trading

Hi Everyone! This is Tony and I wrote this article that that gives insight on how to develop as a trader. Hope you enjoy!

Process is defined as: “A series of actions or steps taken to achieve an end.”

Today we will not examine the process of making a trade; we will examine the process of making a trader. You, being developed, into the trader that you want to be. In this brief article we will look at characteristics you need to be a successful trader.

In today’s culture we, in general, tend to want the “drive-thru” version of everything. “Give me a number 4 with pickles and no cheese. I’ll have a sprite and… 5 vanilla milkshakes please.” If we need to make a trip to London from Chicago, we jump in a plane and are there in 8 hours and 14 minutes. If we want some cash, we can stop at the nearest gas station and use their ATM. In many, not all, but many of our day-to-day objectives there is no waiting, delay, or needed effort. I propose that many of us have taken the “Drive-Thru Mentality” and applied it to areas of our lives where it should not be… like building wealth.

To be developed into a successful trader we must be trained. We need to be developed through a process. This takes time and discipline. This takes work and effort. I would propose to you that this should even include accountability to your mentor in trading. It takes teach-ability and passion. Being a successful trader also requires consistency. Before we can be a consistent trader, we need a plan. Without a plan, there is no way to measure what consistency is. We must develop our trading plan, prove it on a demo account, and stick to it after we begin trading live. There are many characteristics that I believe are needed to ensure success, but I want to briefly touch on two of them. To be a successful in Forex Trading we must have these critical characteristics: discipline and teach-ability.

Discipline

Develop and perfect your trading plan while still trading a demo account. Stick to your plan, stay disciplined and prove that your plan works while trading demo before going live. I’ve heard that 95% of all Forex traders are unsuccessful. I believe that statistic and I think it is because of an undisciplined hunger for riches. If you do your analysis and the criteria is met to make the trade, set your stop and do not move it unless you are locking in profit. After your strategy is proven successful with a long term test, memorize your strategy! Stick to your strategy! Love your strategy!

With discipline, order, and structure to your trading plan (which consists of your trading vision, goals, and strategy), you have a good shot at being successful in your trading.

Teach-Ability

Find some one who is already successful and study them. Watch them, observe them, take notes, memorize their quotes, and apply yourself to their knowledge. Some of the things that make them successful will rub off on you.

Never stop learning. Do you realize that you could read 10 books a day for your whole life, and there would still be millions and millions of books that you have never even heard of? There is so much information available to you, that there is no excuse to stop acquiring it.

Invest in yourself. The greatest investment is self investment; after self investment, you have something to give others. If you can’t invest in yourself it is not likely that you’ll be able to invest in others. Benjamin Franklin said: ‘The best investment is in the tools of one’s own trade.’

Apply this principle to your trading. Read articles, go through BabyPips education , then do it again, and again. If you want to develop into the trader you want to be, commit yourself to instruction. Learn. Learn. And learn some more.

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  • Anonymous

     Hi Patrick,

    Thanks for commenting. Learning those “fundamental drivers” as you call them, is very important.

  • Anonymous

    Haha, how would you know what I understand? If you disagree with anything in the article feel free to disagree. I appreciate your comments.

  • Patrick

    Thanks for your article Tony, personally, I think it takes years to become a good trader. Most budding and aspiring traders are led to believe that if one should mix a few lines together and when this one crosses the other, you got a deal.  Not so at all, it is far more important to understand the fundamental drivers such as interest rates and general “health” of a country. First this and then money management. Most people don’t understand the importance of this aspect. I’m not just referring to a coin flip numbers game. One needs to understand lot sizes, position sizes not to mention what to do about draw down. Get those two right and understand them well and you can take the worst performing system or whatever you might call it and make money with it. So traders education is paramount. The other is this, most people wouldn’t know where to start looking to get an education in forex trading. My advice to new traders is to pay attention to things such as interest rates, DJ industrial ave, or things that make the market tick. Then apply your lines stripes or whatever takes your fancy as you will already know the direction of the market. Personally I disagree with indicators anyway as the price is always right. 

  • YankeeClipper1

     Who taught the first astronaut to, in fact, become an astronaut?
    (Or, for that matter, the first english teacher to teach a spelling class?)
     

  • Nick

    Over 5 years on consistent profit and trading as my full time job.

  • Nick

    No you cannot, you do not understand what it takes to be an astronaut or a trader.

  • Anonymous

     Hi Jackie,

    Thanks so much. We’re glad to serve. God Bless you and your family also!

  • Anonymous

     Hi Nick,

    Thanks again. Even if I haven’t been an astronaut for 10 years I can share the principles on what it takes to be an astronaut. I understand your point and I look forward to growing in success as I continue follow some of these principles I shared.

  • Nick

    The point, which you have skirted, is that you are not a professional traders so you should not be giving people advice on how to become professional traders. I am not an astronaut but I could take your article, replace the words ‘Forex trader’ with ‘astronaut’ and post it on a Space forum.

    Does that mean I have any great insight into what it takes to be an astronaut? Will I actually be helping people by giving them empty platitudes. Everybody says the same rubbish, ‘work hard and you will succeed’ but you have not succeeded yet Tony so you know nothing.

    If in a year or two you are successfully trading Forex consistently, then you can attempt to teach others how to replicate your success. You have no business teaching people how to become traders because you’re not a trader. I have no business teaching people how to become astronauts because I am no astronaut.

  • Albert

     Hello Nick:

    What gives you the authority to regard yourself as “A Real Trader”??

  • Jackie W. Cox

    Thank you tony for this informative article. I appreciate all the articles that I read on Winners Edge Trading. You have done well on this article. I hope to read more from you in the future. thanks again and God Bless everyone there and your families.

  • Anonymous

     Thanks, glad you enjoyed it!

  • Anonymous

     Hi Samad,

    Thank you for the encouragement. God bless you too!

  • Anonymous

    Hi Anil,

    Yes, absolutely, thank you for your comment. Sticking to your plan may mean to: not take a certain trade because o the market conditions. That applies here too. Thank you for sharing!

  • Anonymous

     Hi Nick,

    If you apply this “cheesy, feel good article with no substance” it will change your life. If you have already applied these principles to your life, I’m happy for you! Keep up the good work.

    All the best,
    Tony

  • Anonymous

    Hi Jspider, thanks so much for sharing the info. My view on the “constantly loading yourself with… ideas” is that, by doing so, you keep your mind engaged. Not trying to apply all you read and/or hear but just growing intellectually. I think it’s critical for growth; like being in a trading “greenhouse”.

    WOW, 60 to 100 pips/day. Thank you for that wisdom and I will take note of that “KISS” method of thinking. I will copy and paste part of this comment and save it on my computer. 🙂 I appreciate your comment and advice!

    Best Regards,
    Tony

  • Anonymous

     Thanks for the comment better! Yeah, we all have a lot to learn :).

  • Anonymous

     Hi Mike! Thank you for that wisdom: “The latest thing I have learned, and to me it is actually the most
    important, is the fact that a successful professional trader, first and
    foremost, protects his balance…. the profits are secondary.” Thanks for the comment and may all your pips be profitable too 🙂 .

  • Anonymous

     Hello! Thanks for the comment. A strategy may take time to develop but with help and studying other successful traders I believe it is very possible to develop a profitable strategy.

  • Drjhcoston

    Good food for thought.

  • Samad

    Thanks. The points really vere key points.
    keep your way. God bless you. Have a good time.

    samad

  • Anil

    I liked your article on development as a trader. I would like to add that it is difficult to stick to a plan all the time as the market shows different moods and is highly unpredictable. So what is important is to master the market first which I am doing right now by playing in a demo account the strategy ” Learn to take losses first then earn profit” In the meanwhile the profits come automatically.Moreover it gives you a very good idea about the direction of the market.So first take losses in small mini lots and then take 20-30 pips profits in regular lots. That is enough to keep you active in the market.

  • Nick

    What gives you the authority to tell people how to become traders? From what I gather you’re not yet a successful trader yourself. You have no basis from which to give people advice.

    You’re just regurgitating the same drivel people here everywhere. Essentially, you’re telling people to stay disciplined and work hard. Wow, what insight….. being disciplined and working hard will make you successful at anything. We all know that, it is not news to us.This is just a cheesy, feel good article with no substance.Regards,A Real Trader

  • Jspider

    Thanks Tony for a great short synopsis but I must disagree with item 2 on your list.
    Disipline is absolutely important and must be number one.
    I don’t think that reading everything you can on trading and constantly loading yourself with
    new systems and ideas is really beneficial. I think it will result in information overload. As a psychotherapist I personally believe that KISS is the second  most important item on your way to success. I call it Keep It Simple for Success. Just do the following.
    1. Look for a system that will make you 30 net pips a day.
    It is not that hard to do. Look at some of the videos offered here on Winners Edge.
    Watch Michael Storm’s videos as a good example.
    2. Once you have that system use DISICIPLINE to stay with the system.
    3. Build your account up to $20,000
    4 Trade 2 contracts every day X 30 pips = 60 Pips = $ 600.00 a day X 5 days = $3,000.00 a week and that will amount to over $ 100,000.00 a year
    5 You can start with $ 2,000.00 and build to your $20,000.00
    6. I trade a system that is so simple people who have seen it are shocked. I average 60 to 100 pips a day trading for 4 hours. So, I know it can be done.
    I guess what I am trying to say in my humble opinion is. Learn, Develop a simple price based system, stay disiplined and KISS
    Jspider

  • Peter Skinner

    Tony
    Wise words indeed. You are absolutely correct that you should strive to learn something every day of your life. In this way you can only improve and be a better person.

    Thanks for your thoughts

    Peter Skinner

  • YankeeClipper1

    Wow…. a much needed article.
    As Casey knows, I’ve been trading for about 5 – 6 years now… I like to think of myself as a “professional trader” and yet I am constantly on the look-out for new and improved methodology that I can incorporate into making my trading plan stronger and better. I look at every article, every indicator, strategy, video, EA… in short everything that comes into my email box I look at. I may not use all of the information that I receive… however I take on board whatever fits into my own personal trading plan. Tweaking here, adding there, subtracting where needed. Learning to become a trader is not a five minute read of a .PDF. It’s not downloading the Meta4 platform or adding a few technical indicators and then blindly entering a trade with no thought of strategy, planning… that includes exit points, stop losses and (most importantly) Money Management. The latest thing I have learned, and to me it is actually the most important, is the fact that a successful professional trader, first and foremost, protects his balance…. the profits are secondary. (GASP!!… SHOCKED RECOIL!!)
    My apologies if I waffled on a bit… I haven’t written an article for W.E.T
    . for a long time lol

    May all your pips be profitable

    Yankee (aka Mike Griffiths)

  • Buster-48

    fine words unfortunelly to find someone with a working stratagy( and theres lots who say they have but havent) is not that easy,Ive heard so many “experts express their opinion but when you analise their stratagy it falls apart ,but thanks for the article.