Five Tips to Help You Start 2009 with a Winning Edge! (Part 3)
01/14/2009 12:01 pm EST
More is often less! One of the most common problems I see in traders when they first start one of my mentoring programs is that they try to watch too many markets. Many times, these traders are struggling to get in the black on a regular basis, and yet, they’ll be trying to learn a new trading methodology while watching fifteen or twenty markets. Unless you are a longer-term position trader, you don’t have the ability to watch twenty markets in real time and give each market the attention it needs. It’s hard enough to learn to juggle three balls with your feet firmly on the ground, but imagine trying to juggle twelve balls at a time while riding a bicycle!
I think that the majority of traders would be well served to find four to six markets that are liquid and have a nice daily range. Rather than overextend their focus, they can then closely monitor the handful of markets they have chosen for trade set ups they know they are capable of trading successfully. Once they have mastered the tools they use to trade, and have developed their eyes to spot repeatable trade entry set ups, four to six markets will present more than enough trading opportunities.
Most traders focus on their winning trades, but all of us must realize that when we lose money, we have to make that money back before we are net profitable. This sounds like something everyone knows, but believe me, many traders just don’t think that way. If I had a dollar for every time a trader told me about their “big trade of the day,” but admitted that they net lost money on the day when pressed, I wouldn’t need to work another day. People remember what they want to remember—and that means they conveniently forget what they don’t like to think about. By looking at too many markets, you may find more trades, but at the end of the day, or at the end of the month, you may be taking less money out of the market. The quality of your trades is much more important than the quantity of your trades.
More tomorrow in Part 4 of 5.