5 Trading Truths No One Will Tell You

Written by John Stuart on December 15th, 2015

5 Trading Truths No One Will Tell You

Trading is not glamourous.

Despite what the internet wants you to believe.

Let alone the thousands of online gurus out there.

Good trading is disciplined, consistent, and ultimately… Boring!

Yes, you read that right.

As traders we often hear what we want, and not what we need.

Which is why the latter is something you won’t find on many forums, websites or in the thousands of free ebooks out there.  

Successful trading is about a number of things.

And more often than not those things are not what people want to hear.

That’s why I want to reveal what they are, and how you can use these trading truths to help speed up your trading success.

 

The Top 5 Trading Tips You Won’t Hear Anywhere Else

 

Trading Truth #1: It's Going To Take Time

It will take you longer than you think to succeed in trading.

No, really.

Most traders I know don’t actually realize how long it takes to become profitable.

Sure, it’s obviously worth the wait.

But they also don’t realize what “the wait” entails either.

Most of these traders try take short cuts because they tend to get impatient.

That leads to trading on emotions.

And that’s a one-way ticket to over-trading, revenge trading, over-leveraging and so on, all in order to try ‘fast forward’ their trading success.

The sad reality is that the opposite happens.

They hit patches they weren’t prepared for.

Let alone they haven’t put in the time, effort, or analysis to overcome these periods.

Ultimately they end up losing money.

A lot of it.

And they tend to leave themselves worse off than when they started trying to fast-forward their trading success.

If you want to find the trading success you crave so much, you need to be in it for the long haul.

Having a short-term approach is short sighted and is a recipe for disaster.

 

Trading Truth #2: You Can't Master The Market

Trading is not about mastering the market.

It’s about mastering yourself.

Deep right?

Well, not really.

There are tons of trading platforms, fancy looking pieces of software, algorithms & EA’s, and strategies out there that it’s easy to get sucked into the mantra of “mastering the market”.

Heck, it’s what the marketing of these fancy (and might I add extremely expensive) systems want you to believe.

This is something you’re probably not going to want to hear, but I’m going to tell you anyway.

You can’t master the market.

It’s out of your control.

What you can master is yourself.

And that’s where the secret to profitable trading lies!

Look, you obviously need a sound system or strategy that fits YOU and your trading personality.

But what I’m saying is that it’s not the ONLY piece of the trading puzzle.

The problem is that most traders I meet focus entirely on that puzzle piece.

No matter what system or strategy you have, if you can’t learn to master your emotions you will not make money in the market.

Fear, greed, revenge…

This is the stock market we’re talking about here, not a soap opera.  

These trading demons will derail you if you give into them.

However, master them, and “mastering the market” is unnecessary.  

 

Trading Truth #3: You Have To Trade On Your Feet

Not literally on your feet.

I mean you need to be nimble, adapt and constantly develop to remain a profitable trader.

The markets change.You have to improve your ability to read the market and then trade it

There’s nothing you can do about that.

However, if you know the markets are constantly changing you can adapt.

And adapt you should.

Think about it like this, if you did the same thing over and over in the markets in the coming years, do you think you’d bank consistent profits?

I didn’t think so.

That’s why if the markets are constantly changing, you need to do the same to stay in-tune with them.

If you’re stuck with a rigid set of rules and indicators, you’re better off using an algorithm or a robot.

You have to improve your ability to read the market and then trade it.

Doing the same thing over and over won’t do you any good.

 

Trading Truth #4: You Need To Trade Like A Goldfish

As a trader you can’t trade with memory.

What do I mean by that?

Your previous positions don’t matter.

They don’t affect your future trades.

Don’t get me wrong, I understand how hard this is.

A lot of traders have preferential stocks.

And that’s fine.

But if the market is always changing, the same trade setup pretty much won’t be seen ever again.

(Don’t make me start comparing trades to snowflakes!)

But seriously, your strategy will spit out a random number of winners and losers if you give it enough time.

Which means you can’t let past trades influence future ones.

There’s no ‘one trade’ that has more importance in a series of trades.

It’s the consistency, discipline and patience over a large enough amount of trades that gives you your edge.

That’s why you need to detach yourself from your previous trades.

And it works both ways too.

Taking in to account that you have a strategy and you’re aware of things like your win rate, risk reward ratio, and position sizes, a winning trade should really have as little an impact as a losing trade on your future trades.

Simply because you know the expectancy of your trading system with those parameters.

Forget about your last trade and keep on trucking trading.

 

Trading Truth #5: Don’t Just Trade For Money

I know right?

This is a bit of a mind-boggler.

We all trade to make money don’t we?

I mean the thousands of internet "gurus" want you to believe that as well don’t they?

That trading is a quick fix to easy money.

And that these are the right goals.

Pfffft.

Look, don’t get me wrong.

Getting rich and quitting your day job are ambitious and worth-while goals to have, but they’re not realistic goals.

I say that because just about every trader I know that’s focused on these things as top level goals have in fact lost money.

Ironically they moved further away from them by focusing on them so much.

This isn’t like on the golf course where if you constantly think “Don’t hit it in the bunker, Don’t hit it in the bunker, Don’t hit it in the bunker” you just end up whacking it into the bunker…

I know it sounds like something out of one of those cheesy self-help books you see splashed around Exclusive Books.

But trading is not about the WHAT (The money), it’s about the HOW (How you make it).

Yes, it sounds like a cliché (and believe me it actually is) but the honest trading truth is that at the end of the day you HAVE TO enjoy the art of trading.

The process.

The game.

The challenge.

You need to enjoy it all.

The self-mastery, analyzing the right information (fundamentally or technically depending on how you trade).

You need to enjoy finding solid trade entries, the right exits, not to mention managing risk properly along the way.

And enjoying all of the above (and then some) requires patience, discipline and the understanding that everything I’ve mentioned is about self-mastery (Remember trading truth #2?).

You have to transfer your desire to make money into a desire to develop good trading habits & routines, and to trade properly.

You do this by realizing, believing and acting in-line with the fact that HOW you make money as a trader is by focusing on the process, not on the money.

 


 

 


 

5 Steps To Trading Success

 

Some of these are hard to get one's head around, I know.

And I’d be surprised if you didn’t immediately grapple with them yourself.

But successful trading starts with facing the trading truth.

And that is:

  • It will take you longer than you think to succeed in trading
  • Trading is not about mastering the market, it’s about mastering yourself.
  • You need to adapt and constantly develop to remain profitable
  • You can’t trade with memory
  • Don’t just trade for money

Stick to these trading 5 truths and you’ll find yourself on the path to speeding up your trading success.

Until then, here's to profitable trading. 

John Stuart

John Stuart
Content Director
The Money Lab