Step 1: Evaluate the Business (and Yourself)
Unbelievably, this is the hardest step you will take. Looking at what you’re currently doing and how it is working for you is often difficult. For a struggling trader, the hardest thing is admitting what you’re doing isn’t working. However, it is important to evaluate your progress to see what you are lacking. Maybe you are better at spotting certain market patterns than others or maybe you struggle with knowing when to call it quits in a losing trade. Carefully break down your trading journal and evaluate what days were good and which trades were a success. Evaluate your win/loss ratio and look for patterns in your wins and losses. Maybe all the successful trades you took were short trades. One of the hardest thing for a new trader to figure out is what they are good at. Focus on what you do well in your day-to-day trades and work on improving the rest. You must recognize and admit honestly where you are in the trading learning process in order to improve!
Step 2: Educate Yourself (and Practice!)
This is the one that takes the most time. However, the sooner you start, the sooner you will see results. Read everything you can about trading. Find blogs, books, newspapers, and magazines about the subjects you’re trying to improve. Don’t forget to read about the psychological aspect, as well. Controlling your emotions during trading can turn a good trader into a great one. Now, many traders forget that education is not simply reading but also practicing your technique. Consider trading a sim account to use the techniques you just learned without compromising your piggy bank. When you can document predictability in your trading, you’ll know you can switch back to sim and enjoy the success your newfound education and practice has earned you.
Step 3: Create a Trading Business Plan
Have you been carefully curating and evaluating your trading business? Well, good! Now we put that knowledge into a carefully crafted plan. Like any other good entrepreneur, it is important to know what your goals are and how you will achieve them. Take careful stock of what you’re good at, making a list of trades you will or won’t take. Now, keep that trading plan somewhere you can see it! Re-evaluate yourself as you continue to trade. As you grow more confident, your priorities may change. You can read more about how to build a successful trading plan in our other blog post HERE.
In conclusion, these 3 steps are all something simple that you can start today. While they do require work and time, they will help to grow your trading business success. Many traders will also use the inclusion of indicators to speed this process some, but that is not for everyone. Evaluate what you know and what you don’t and start working on those weaknesses today. After all, that tree isn’t going to grow if you never plant it.