After so many years teaching technical trading to hundreds of traders and investors as well as coaching and mentoring active traders, let me tell you what I learned and obviously, what I always try to teach to our TradingTotal students: The most important thing is to provide and transfer the necessary knowledge and experience to help traders to discover how they are happy as traders, to help them to find their “comfort zone”, their “sweet spot”.
This process implies to define the trading style, the type of instruments to be traded and the trader’s risk profile, according to every particular situation in order to create a self confident trader very happy to wake up early in the morning to start his/her trading activities.
Educators can provide tons of technical analysis information and theory but if you can’t contribute to clarify the immense number of options or possibilities faced by the new trader in order to decide what to trade and how to trade, all the transferred knowledge will be completely useless.
Of course, you need to learn a lot of trading techniques, and you must practice and test those concepts on a realistic environment to evaluate yourself with the educator's collaboration. But, what we are trying to explain is that your educator must always evaluate if the provided education focused in a certain type of trading is the best option for you.
I would like to contribute with my specific experience giving you some tips in order to find your “comfort zone”.
- Never accept what others are doing/trading as the best option for you
- Try to find-out how do you manage frustration, how do you manage losing trades during your learning and simulation phase. In real life with real money, it will be probably worse.
- Try to discover how the size of a loss actually impact this frustration, trying to determine the dollar limit for a comfortable losing trade, at least during the initial stage of trading. This limit has obviously a real psychological –emotional component but it also has an objective financial component directly related to your “financial shape” mainly formed by the financial independence you have in terms of “pain resistance” and “opportunity cost”. Believe me that is a key factor that can literally kill your future as a trader if a mistake is made.
In other words, you have to answer yourself two question:
Can I live without earning money from my trading activity for at least one year without using my trading capital for other purposes?
How do I feel if I lose 25%-30% of my trading account due to an improper trading plan execution?
Your training period and your simulation process will tell you a lot of things about your ability to manage emotions and what type and style of trading make you really happy. Nobody can take control of your decisions. It’s all about you, but at the same time there is no doubt about the importance of having an skilled and experienced tutor to help you.
