Many traders in the beginning of their trading journey assume that there is a secret formula and keep looking for the magic formula which will lead them to success and make them rich overnight.
Believe me, there is no magic to success in the stock markets. If you want to be an successful trader, you need to have a few qualities. The most important of them is discipline, hard work and money management. These are the three legs of a stool and if one of the legs breaks, the stool becomes useless.
In addition to the above mentioned 3 qualities, you need to build your own system and keep learning with ever changing markets and the technology but the basics will remain the same for years and decades to come. One might have traded in commodities then equities, forex and now crypto currencies.
The secret to trading is that there is no secret. There is no magic formula which we can apply can keep on making money. You must have seen that there are so many books on technical analysis, different authors, different trading systems, different indicators, different patterns, tools, etc. Never try to find or look for that magic trading system because a system which will work for some might not work for some others.
Always read, understand and test the trading system on paper (trading) before you put them into actual use. Try to build and use the best system that suits your way of trading. It can be a combination of tools already available and developed by an expert. For example I love the Candlestick Charts, a few patterns, MACD, Bollinger Band and volumes. You can choose your own after studies and tests.
Why Traders- Experts Sharing Secrets
You might be thinking that why do traders/experts waste time share their knowledge by writing books, articles, holding seminars, sharing calls, making videos, etc. Don’t you think they are giving out their secret formulas? Should they not be using this time to keep making more and more money?
The very reason for sharing their experience or techniques is that these are not secrets. Moreover they have spent a lot of time and energy developing these techniques. They have seen many ups and downs on their path to success.
Some want the newbies to be successful and thus try to make their path easier. But in majority of the cases (99.99%) they are still trying to make money and are also in the process of becoming famous. There is nothing more infectious than fame and power of money except political power.
Also success of others will never diminish the success of these experts or market gurus. Trading is such a rich field that you cannot grasp complete control of it i.e. the markets. You cannot become an 100% expert but you can always gather enough expertise to become successful.
You can be an trader who trades intraday, you can be an investor, you can trade in stocks, futures or options. You can even choose all the vehicles and become successful but history tells us that most successful traders have chosen one vehicle worked hard to become an expert in that particular field.
We will discuss further in upcoming blogs.