Bulls on Wall Street
Jack of all trades, but not a master.
If this describes you, you will never be able to generate permanent income from the stock market.
Spreading too thinly has deadly consequences. One of the most important steps in your trading career is figuring out your go-to trading strategy. Once you find this setup, your trading career will change forever.
In today’s blog we are going to discuss why you only need to master ONE trading strategy and how to do it:
Find your niche
The first thing we have been saying to all of our students since 2008: there is no Holy Grail strategy that works for everyone. Every dealer is different.
Stop blindly following someone else’s strategy:
Definitely study other strategies. But you cannot copy other traders and be consistently successful. Use them to create your own.
Why? Because you are not the same person. You don’t have the same bankroll as this trader. Different willingness to take risks. Different personality. Different instincts.
Find a commercial niche
Finding and mastering a trading niche is the most important step in getting consistent results in your trading. There are thousands of strategies out there and can be quite overwhelming for new traders. Your quest is to find just one strategy that can generate income for you on a permanent basis.
To get consistent income from the stock market, you need to know yourself and tailor this strategy to it.
Find a strategy that suits your lifestyle and personality
To find the best trading niche for yourself, you need to be very confident and know your strengths and weaknesses. The reality is that you will have difficulty executing some strategies because your personality is not the right choice for them. Some trading strategies require you to sit in front of the computer during the market opening to get in or out of stocks.
This is not realistic if you have other commitments during market hours. For example, let’s look at the day trading strategy for quick pullback. Unless you are a quick and decisive person, you may not be able to successfully execute this strategy. This strategy is typically used to trade volatile stocks and if you can’t react quickly enough, you will miss out on getting started.
You might have the right personality to trade with this setup, but when you work as a full-time doctor you don’t have the flexibility to sit in front of a computer during the opening. Swing trading would be a better trading style that would suit you. You need to know yourself and find a strategy that you can carry out with an advantage.
This is not an overnight process and requires experimentation. However, once you find a profitable strategy to execute, you will have already outperformed 95% of the other traders who try.
Find your go-to setup
The best traders have a setup they know like the back of their hand. To begin with, you need to focus on finding that setup that you can rely on to bring you some income. You should know all of these things about your go-to setup:
-What types of stocks do you trade?
-What timeframe you are trading
– What patterns are you looking for
-What counts as an entry signal
-What counts as an exit signal
– How to determine your $ risk per trade
Deviate from your niche
Mastering a setup takes time and you have to keep refining it. One of the hardest things for new traders to do is stick with your setup and not deviate. There are so many stocks gape and move around every day that it’s easy to get distracted and try to play a different setup.
The discipline of staying in your niche in the early stages of your trading career is CRUCIAL. Once you have mastered your setup and have a long period of constant gains, you can start adding more setups to your repertoire.
Trust your trading data
Refining an unprofitable strategy is a slow, painful death. Don’t believe anything someone tells you about trading setups until you see with your own eyes the actual data to support this thesis.
You will see many claims on social media about supposedly successful strategies. They may work for others, but you don’t know if it will work for you until you’ve tried it. You have to refine your strategy yourself:
The only way to find out if you are trading a strategy with advantage is to track the data yourself. For this reason, in order to find trading success, you need to keep a log of all of your trades. If you haven’t made money for a long time, there are a few changes you need to make.
If you don’t have positive expectation with your trading, you are just playing and you will lose in the long run. We recommend using TraderSync to record your trades.
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