Today we are going to talk about how to be a trader. The brokerage account (where you have your money) will consider you a trader if you buy and sell stocks in a certain way or a certain number of times.
Today we don’t want to talk about what the brokerage account considers traders. Many people that brokerage firms consider traders are gamblers. They have no clue what they are doing. We want to talk about how to be a good trader.
How to be a trader: What will you trade?
To become a good trader you have to first determine what you will trade.
You can be a:
- currency trader
- bond trader
- equity trader
There are thousands of markets or companies you can trade.
How to be a trader: How will you trade?
The next step is to determine how you will trade a particular market. Will you just go in and make random picks or will you use a systematic approach?
I played sports growing up and as I got older I began to lift weights. I learned very early in my weight lifting that you had to go in with a plan. For me it was Monday do this and Tuesday do this. The result was that after months of training I began to see improvement in my strength.
If I went in with no plan at all and I slapped on 300 lbs. on the bench press I would have killed myself.
Just as a weight lifter needs a plan a trader needs a plan as well. Random is not a plan.
How to be a trader: Discipline
The next thing a good trader needs is discipline. The discipline trader has a much higher probability of success than the undisciplined trader.
Discipline means you stick to the plan no matter what is going on around you.
If a pilot takes his eyes off the instruments in a storm then the pilot is in very dangerous territory. If a trader takes his eyes off the plan in rocky markets then the trader is not a discipline trader.
The result will be an account crash.
How to be a trader: Timing
The next thing a trader needs to try to figure out is what kind of time frame you will trade.
Some markets move quicker than others. Some people’s lifestyles are different than others. For instance you may have a job where you don’t have access to a computer. It would be difficult to trade constantly throughout the day. You might want to trade only on the end of the day price or even on the weekly price.
There are different time frames that every trader must figure out. Many people misunderstand what trading is.
How to be a trader: Who can become a trader?
Some people think trading is a way to get rich. Others think that trading is just for the rich that live on wall street. They spend their lives blaming Wall Street for their financial problems. Others think that trading is one big secret that can’t be done by the average person. The truth is in today’s time with today’s technology anybody can become a trader. To be a trader in today’s market all you need is access to the internet and the world of trading is at your fingertips.
It’s easy to become a trader the hard part is succeeding. There are different types of athletes. Some have no skill and no desire. They will never see the field. Some have a lot of skill but no desire. These may excel in elementary but soon others will catch them. They lack the desire to get better.
Then there is the athlete that has little skill but much desire. This athlete will put in the work to get better and they will get better. They will do very well in sports.
The last athlete is one who has much skill and much desire. These are the ones that make it big. These are the Manning’s and Brady’s of the world. This is what the NFL athletes have. Not everyone has what it takes to be a pro trader. Everyone does have what it take to succeed. All you need is desire and a willingness to achieve your goal and you will succeed. Have the desire to learn a system and you will succeed.