This article in The Trader’s Pendulum Series discusses the Transformation Process from The Technical Trader’s Trap to Transformed Trader. You might ask, ‘‘If I am stuck in the Technical Trader’s Trap, how will I get out of it? And how do I turn myself into an Entrepreneurial or Transformed Trader?’’ Or in other words, in the context of this Series, ‘‘How do I transform myself from a Frustrated Technical Junkie Farah into a Successful Entrepreneurial Stacey?’’ (from the last article)
Depending on your level of experience in trading and your trading habits, you fall into one of the quadrants in the Table above. The question you need to ask yourself is this: ‘‘Where am I now, and where do I aim to be?’’
If you have just started trading, your job might be easier because you are not set in your ways. If you follow this series or have read the book, you will soon see yourself form positive habits and modeling the way successful Entrepreneurial Traders run their trading business.
Start strong and start in the right direction, and you will be well on your way to success. If you’ve been trading for a while, do not fret if you find out you have formed some negative habits in trading regardless of how long you have been practicing them. Given the difficulty to break bad habits, finding a coach can help develop positive routines that are geared towards becoming a successful trader.
Keep in mind that it is easy for you to get into the successful quadrants, II and IV, only to find yourself falling back to the unsuccessful quadrants, I and III, if you do not have a process to hold yourself accountable. This is the reason why I highly recommend you learn these habits.
Here are three broad areas that will help you start on the right path.
First of all, make sure you have entered the trading business for the right reasons. It is true that successful trading can be quite financially rewarding, but you must understand that trading is not a get-rich-quick scheme. It takes a lot of hard work and dedication to get there.
As an Entrepreneurial Trader, you need to go through the process of finding a trading style that suits you the best. It does not matter whether you eventually land on momentum trading, day trading, swing trading, or position trading; as long as the style fits your personality and preference.
You should also set up trade plans based on your proven trading system that will capture trades in different market cycles and guide your actions, so you will not trade emotionally. Stick to the plan and system consistently and learn the correct process to tweak them if you find some flaws in them.
Continuous Feedback and Improvement
Getting everything right in the first few attempts is impossible. It is okay to encounter hiccups in trading. However, when they do happen, you must make sure you know how to track them to learn the lessons. Similarly, you will want to track your good performance as well so that you learn how to repeat your successes.
Most successful business people engage coaches or mentors at various points in their business development to help them grow. At the most basic level, observe what top traders do in their trading business and model their habits of success.
If you agree that you want to become a trader or investor who stays out of the Technical Trader’s Trap, then you will need to become an entrepreneurial trader. Next week’s article looks at The 10 Habits and the Trader’s Scorecard.
I created the FX Trader’s EDGE Coaching Program modelled after the “10 Habits of Successful Traders”, which is the title of my newly published book by Wiley.
Excerpted with permission of the publisher John Wiley & Sons, Inc. from The Trader’s Pendulum: The 10 Habits of Highly Successful Traders. Copyright (c) 2015 by Jody Samuels. This book and ebook is available at all bookstores, online booksellers, and from the Wiley web site at www.wiley.com.