(4 minute read)
During mu Ph.D. on Derivatives Trading, I found that 40% traders quit trading in first month of their trading, 80 % within 2 years, 7% remain after 5 years and only 1% traders survive after 10 years of consistent trading.
Only 1% traders consistently make money in trading year by year and since I started trading in 2010 and still trading profitably in 2021, I think I am eligible to guide you as to how you can be in that top 1%.
I will not tell you to do that these 1% people do if you want be in that category.
Rather first thing that you need to do is stop doing what 99% of them doing.
Because it is easy to not do something than doing it.
Just to clarify this point, if you want do become slim, it is easy to not eat oily food than to eat salad.
So if you avoid those things which these 99% do, you will be well ahead...
The first thing that you should not do (at least in early phase of your career) is to think about earning profit. Do not think about earning money from the market initially.
In order to make consistent money from the market, a trader needs to design a complete trading system that will tell him following things:
1. How to enter?
2. When to enter?
3. When to exit in loss(i.e. stoploss)?
4. When to take profit?
5. What is your risk reward?
6. How will you improve win ratio?
7. How many quantities to buy?
8. When and how much to add if your trade is in your favor?
9. How will you manage the risk?
10. How will you keep your calm when trades are getting stopped consecutively?
Basically, you need to build a system that is capable of scaling up and capable of giving you a consistent profit with very small drawdowns and smooth equity curve,
When you focus on profit, your entire energy is wasted on making money rather than making a profitable trading system.
An it may happen that you may manage to get some profit through luck but that is not sustainable. Market will soon find out your weakness and your entire profit of so many days/months will be wiped our within few hours.
Market punished the indisciplined and rewards the disciplined.
It is only when you develop your trading system and follow it consistently and religiously, you can expect the long term success in trading.
Trading gives you freedom but you need to work in correct direction and get trained under a professional mentor.
There is no point in making all these mistakes on your own and learn from them because every mistake is going to cost you money, stress and going to decrease your enthusiasm of remaining in the market.
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Happy trading!
