Yeah, you heard it right, it's not how to earn money, but how not to blow up, well, everyone here knows what to do, but only professionals know what not to do, as its not about how much we earn, but how much we don't lose, so without wasting much time, let's begin.
In Trading, Our first priority should always be capital protection.
Let's understand this with an example of legendary sprinter, Usain Bolt (Lightening bolt), he started with nothing and with patience, has become the best, Now for sprinting, we first need to start slow and learn how to stand first, then Learn how to walk, and running comes later.
Here, in this example, our legs are the capital, as we can't even imagine running without our legs.
If we start running without Learning the prerequisites like standing, walking.
Then we'll end up with multiple leg injuries and might also loose our legs.
And now there's no chance of running at all,
But Usain Bolt started slow and spent a lot of time in preparation, and got the desired results.
Well, there're many ways out there to not lose money, but they're all useless without a conservative mindset and discipline.
So here's the list of ways to help us not lose money,
1)First Learn, Then Earn.
- So let's understand how to apply it, Doesn't matter what profession it is, we can't get into it without learning about it and then comes practical understanding of it, there is no other choice for us, than to start from zero, we can't master anything if we're doing it just for the sake of money, doing it for a purpose is what gives us an edge over others.
Let yourself learn trading and gain experience of the price action before thinking of earning money from trading, the money in trading is what fails most of the people over here, so the first rule is not to think of earning money but to think of following the process with no doubts and believing in yourself and having patience and give time to learn things and experience is the magic.
Trading is the hardest way of making easy money, and once you've mastered it, the money just flows in like you always wanted, the purpose to have in trading is to follow the process frictionlessly and not run behind money, getting the best trades and giving your best with all the rules and discipline followed should make you happy, never let profits or losses justify your emotions.
2)Start Small.
- Starting big means failing big, no matter how confident you are, start small and you can learn the same things at a small price/loss, the greatest things today had started small one day.
it might be boring to start small, but remember, doing boring things make us a real professional trader in the markets, the things that are boring are considered to be better in the long term, gambling is thrilling, true trading is really boring because we have certain rules to follow and a process driven approach which makes it boring, and boring things make money.
3)Trading Journal.
- not having a trading journal is similar to a company not having their data like sales, profit and etc..., how would we know what's happening? without the data.
trading journal helps us identify our weaknesses and strengths and working on them can improve us throughout our trading journey, no matter how good we are at something, there's always something new to learn and improve,
not having a trading journal is one the most common reason why most of the traders lose money in the markets, of course it's boring to have a trading journal and writing down everything at the end of the day, but as I said earlier, boring things make money.
so having a trading journal is a must.
4)Risk Management.
- Having no risk management while trading is like driving a car without brakes, one or the other day, the car will crash, so it's better not drive a car like that, risk management is as necessary as a parachute while jumping from a plane, imagine jumping from a plane without a parachute, it's illogical, not following the risk management while trading is also illogical that way.
Risk management is a must.
As we've seen people earning for years and losing it all on one day, due to lack of risk management techniques.
Risk management is all about managing your risk in many smart ways, one of them is to have a specified stoploss before even entering the trade and trailing it throughout the trade.
5)Aim For Consistency, Not Luck.
- Consistency is the key you must have heard this a lot of times but how many times have you acted upon it this.
The simple logic is, "one day's profit will not make you a success in trading"
depending on luck is a really bad idea when it comes to trading especially, slowly and steadily, consistency helps us touch the sky, but depending on luck and taking aggressive trades is what drowns a lot of traders.
6)Scale steadily.
- scaling steadily helps us stay in the game as we've seen people making profits but losing it all because of either over trading or scaling too fast which means taking up trading in huge quantities once they've made some profits with small quantities.
It is going to take us some time in mastering trading, we cannot get a baby in one month by getting nine women pregnant. Great things take time.
BONUS :- Trading is game where the long laster wins, and not the fast mover, if you want to be a successful trader, just try to stay in the markets as long as you can and your subconscious mind Will automatically catch up everything and you'll not need to look up things before taking a trade, now that's a secret that most of the professionals don't reveal, or haven't observed, the way to last long in the markets is to save your capital first, and keep learning.
Conclusion :- You can apply the things you learnt here on your trading journey and you will definitely feel the difference because it's better to learn from other's experiences and losses than to lose our own money.
We teach many other things in our mentorship, this is just a trailer of what you could experience with us.
Happy Learning, Happy Trading
Thank you.
- Anurag,
Writer at UnitedTradingIndia.
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