The Wheel of Success
Abdul Hakim Shaikh
There are three spokes that make up, what one can call the “Wheel of Success” as it relates to trading.
The first spoke is content:
Content consists of all the external and internal market information that traders utilize to make their trading decisions. All traders must purchase value-added content that provides utility in making their trading decisions.The most important type of content is internal market information (IMI). IMI simply is time and price information as disseminated by the exchanges. After all, we all make our trading decisions in the present tense based on time and price. In order to “scalp” the markets effectively, we must have the most live and up-to-date time and price information seamlessly delivered to our PCs through a reliable execution platform and/or charting package. Without instantaneous time and price information, we would be trading in the dark.
The second spoke is mechanics:
Mechanics is how you access the markets and the methodology that you employ to enter/exit your trades. You must master mechanics before you can enjoy any success as a trader. A simple keystroke error can result in a loss of thousands of rupees. A trader can ruin his entire day with an inadvertent trade entry error. Once you have mastered order execution, though, it is like riding a bike. The process of entering and exiting trades becomes seamless and mindless. Fast and efficient trade execution, especially if you are trading with a scalping methodology, will enable you to hit a bid or take an offer before your competitors do. Remember, the fastest survive.
The third and most important spoke in the Wheel of Success is discipline:
You must attain discipline if you ever hope to achieve any level of trading success. Trading discipline is practiced 100 percent of the time, every trade, every day.
1. Don't dig yourself into a hole early in the day or in your career.
Be willing to observe the market and make an informed decision. Missed money is
better than lost money, so wait patiently for the best opportunities to arrive.
2. Trade with a blend of anticipation and confirmation.
Balancing these two will mean that you adopt a system of "if this happens, I will do
that." Wait for your pitch!
3. Beware of your trading process following a winning streak.
Many will make money in the market, but discipline is required to KEEP it. Stay on your guard at all times !
4. When you lose, don't lose the lesson!
Forget the names but remember the events. Those who don't remember the past are
doomed to repeat it. Make mistakes with composure and character, without
blaming others, and don't dwell on mistakes.
5. When in doubt, get out.
Scrutinize your positions at all times, each day, and you will not be left holding a
stock without reason. Be willing to change direction at any time, because your
flexibility as an individual investor is a big advantage which should be embraced!
6.You are too greedy.
Thinking about trading profits instead of how you could better execute your plan is
an obvious sign of greed.
7. Finally (perhaps most important), always be in patience.
Long-term patience will keep your confidence and optimism high, and short-term
patience will help you wait for the best trades. Success doesn't come easy, and rarely
are fortunes made overnight. Be willing to pay your dues and put in the work in
orWhen all you have is the "OPPORTUNITY" to trade, sometimes traders find
themselves clicking into trades just to be involved with the markets.
9.Do you find yourself making acceptances for your trades that are not in your plan?
What causes this? Is it a need for action? Is it a need to be right? Is it a fear of
missed opportunity? One of the reasons many traders struggle - over trading or
forcing the trade.
10.The most common misconception among new traders is that they have to
constantly be in the market.
11.Remember it's not the quantity of trades you take, but the quality of your trades
you take.
12.By being in the market all the time the trader does not give him or herself a
chance to pause and will eventually lose because of the unfavorable market
conditions.
13.Don't force trades just because you feel you need to be in the market.
14.Trading out of boredom is the worst reason to be in the market. You have to be
in PATIENCE !
15.Patience is one of the keys to becoming successful trader.
16.Patience will keep you from overtrading.
17.Patience will give you enough time to observe and look for a potential setup for
the next trade.
18.Trading is all about probabilities. You must make many trades to get the law of
averages to work in your favor..
19.You blame others when the full responsibility is yours.
Accepting responsibility is the fulcrum point for succeeding in anything, especially
trading. Doing something about it is the criterion. Execution is the reward, not the
money. Money is the by-product of executing to plan. Do not blame the broker for a
bad fill, when it was you who hesitated. This is just one example, but we are all
aware of many others.
20.Losing traders often take themselves quite seriously and seldom find
humor in market analysis or the trading environment. Successful traders are
often the funniest and most imaginative people you will ever meet. They take joy in
trading and are the first to laugh or relate a funny story. They take trading seriously,
but they are always the first to laugh at themselves.
CONCLUSION:
Its no wonder that one of the first things psychiatrists test for when treating a
patient is whether or not the patient has any sense of humor about his affliction. The
more serious the tone of the individual, the more likely that insanity has set in.
COMMENTS:
Abdul Hakim Shaikh How true. "Successful traders are often the funniest and most imaginative people you will ever meet.
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