Many traders are willing to actively learn trading knowledge and skills to make better trades. However, they often overlook some of the most basic things in trading, while more experienced traders pay more attention to these details.
If you start using these methods, at least you can initially ensure that you are heading in the right direction, avoiding mistakes and detours.
The 10 steps of a successful trader's operation are mainly divided into 3 aspects: except for the first and last aspects, the others are directly related to trading.
First aspect: Preparation work
01: Cultivate insight into yourself
If you have enough self-understanding and a good mindset, you can have confidence in winning even before the battle. For example, under normal circumstances, you can perform at 85% capacity, but if you are unwell today, you may not be able to perform normally, increasing the likelihood of failure.
Regularly ask yourself, how do I feel?
Also ask yourself, what do you really want?
What is my biggest goal?
What is my most important goal?
What is the most important thing for me?
Only when you realize that something might be wrong can you solve the problem. Write down the areas you need to improve and the things that confuse you every day, and then think about how to solve them.
Second aspect: Trading work
02: Daily psychological rehearsal
Take 10 minutes before starting work each day to mentally rehearse the things you need to do one to three times.
The more detailed, specific, and comprehensive, the better. Try to 'calculate more.' When various situations arise, you can respond objectively and calmly.
03: Design a low-risk operational plan
If risks are firmly controlled, returns will naturally improve.
Beginners first consider returns. If I make this trade, how much will I earn? Experienced traders first consider risk. Before entering, they already have answers to how big the loss might be and the probability of losing.
Entering the market in such circumstances will feel very different. Because there is a bottom line, you will be more flexible and less affected by emotions while trading. We pursue low-risk returns.
A. Collect data
Analyze the market comprehensively using various information to form a general view of the market. Choose trading targets and directions. Many beginners think this is the most important part, but in fact, the accuracy of market analysis is of relatively low importance in operations.
B. Analyze win rates
Consider based on experience how likely this trade is to be profitable.
C. Decide when to enter, when to exit, and how much position to take.
This is the most important step; a detailed written plan must be produced. According to research, the likelihood of executing a written plan is greater. If you only think about it in your mind, you may find too many details unconsidered during execution, thus increasing psychological conflict and hesitation in execution. The more detailed the plan, the greater the likelihood of execution and success.
This is exactly what was mentioned earlier: 'More calculations lead to victory, less calculations lead to defeat. By combining judgments on the overall situation with stop-loss strategies and phased entry and exit, significant risks have already been mitigated. It doesn't mean that using these strategies will guarantee profits now, but at least we should aim to walk the right path.
Be careful not to be influenced by others when making trading plans; be independent and listen only to yourself.
04: Track, check charts, look for entry patterns/points.
In life, we may observe: a kitten chases a bird but can never catch it; while an old cat stalks quietly, gradually getting closer to the bird and catching it when it is least aware. This illustrates the difference in hunting between the old cat and the kitten.
This is a survival skill in nature, and it is also a skill needed by traders. Experienced hunters do not shoot immediately upon seeing prey; instead, they gradually approach, seeking the best position and distance, and act at the most advantageous moment.
There is a practice method that everyone can refer to. After listing a variety for tracking, you can make the opposite trade on paper.
For example, if you originally planned to buy but are now hypothetically short-selling on paper, you should continue to observe. When you can no longer bear it and must close the position on paper, that is the best time to buy in. You can try this method for tracking.
05: Action - Entering the market
After tracking to a certain moment, you must strike without hesitation and take action. Be still like a virgin, act like a hare.
Many people come to a standstill at this point. No matter how good the method is, inaction is futile. Of course, this also depends on whether the previous steps were taken seriously.
If you have a plan and the situation in the plan arises, you must execute it without hesitation. Of course, when entering a trade, you need to pay attention not only to the timing of entry but also to the method of entry; do not go all in!
06: Observation
Once action is taken, a position is established, and one enters the observation phase. Continuously observe your holdings; it's very likely that the reasons for your entry have changed, and conditions favorable or unfavorable to you will also change.
In a calm state, ask yourself how you feel about this position? Should you take action?
07: Termination/Profit Exit
This point is about exiting the market; it essentially encapsulates the golden rule.
Exit at a loss
1. Taking going long as an example: If the market drops to a pre-set or trailing stop-loss point, exit; 2. If the reason for buying no longer exists, exit and abandon futile hopes; 3. If a long time has passed after buying and the price has not moved as expected, consider exiting. Normally, after buying, there should be a quick rise; otherwise, do not wait too long.
Profit exit
1. If the profit target is reached -- exit.
2. After making a certain profit, when the market becomes very volatile, you may also choose to exit. For example, in the forex market, when affected by certain news, the market may experience severe fluctuations, and at this time, we can consider exiting and observing.
Some might think this is a great opportunity to make money, but as mentioned earlier, professional traders first consider risk.
Fluctuating trends are hard to grasp, easily triggering stop-losses and causing unexpected losses. When volatility increases, or is likely to increase, one should exit or at least partially exit to avoid risks.
Exiting at a loss is relatively easier to control, but exiting at a profit is more difficult. After all, exiting too early wastes a profitable opportunity, while exiting too late results in profit giving back. So how should one exit to let profits run?
08: Daily summary (Write a trading diary)
Writing a summary after trading each day is the most important raw material for a trader. From the summary, one can look for these issues:
Did you strictly follow your trading rules? If so, even if you lost money, you should praise yourself for today's trading. What mistakes did you make? Our goal is to gradually reduce our mistakes. Through these reviews, you can understand how you are doing in practice.
For trades that leave a deep impression, think of at least 3 strategies that are better than the ones you have already taken. Then tell yourself that next time, I will adopt one of these 3 alternative strategies.
09: Periodic summary
I suggest everyone do a summary weekly and monthly. Take out all your trading records and see which practices have room for improvement. You can also see what progress has been made recently.
'Reviewing the old to understand the new' is a great way to learn. I still often review past records, and every time I look at them, I feel I gain something.
Third aspect: Elevation of realm
10: Being outside the market -- a balanced lifestyle.
This point seems unrelated to trading, but in fact, it is the most important. It is the cornerstone of a trader's long-term stable performance.
For traders, the time spent not trading is the most important.
It is very important to handle life outside of trading well, including adjustments to your physical and mental state, time management, and handling interpersonal relationships, etc.
Just like appreciating Chinese landscape painting, the blank parts are the most important.
Psychologists say that our psychological makeup consists of different components. Some parts seek stimulation, some seek attention from others, and some seek a sense of security, etc.
When you are outside the market, you need to ensure that these aspects are satisfied. Otherwise, they will manifest in your trading and create dangers.
Everyone brings their psychological problems into the market. If you realize you have psychological issues, you should handle them outside the market; otherwise, they will undoubtedly appear in your trades and lead to losses.
Therefore, a successful trader generally has a balanced life, with each aspect such as family, health, and work well arranged, and crises are less likely to occur.
When trading, being very relaxed and calm is one of the conditions for successful trading. Like in other industries, the higher the position of someone, the better their temper, and the more well-rounded their handling of various aspects.
I hope everyone remembers these 10 points and copies the titles down, sticking them next to their computer or in other visible places. This work should be done immediately.
The importance of correct work procedures outweighs abilities such as market analysis and trading skills. Beginners often overlook this and focus more on specific trading techniques.
Many experienced traders often fail at this point. These 10 aspects need to be continuously trained, actively noticed, and gradually improved from each aspect.
Think like a successful person, trade like a successful person, and handle your life like a successful person! How many steps do you go through when you trade?
A rose given to others will leave a fragrance in your hand. Thank you for your likes, follows, and shares! Wishing everyone financial freedom by 2025!
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