Trading Career – Be Successful
Millions of people try to become successful traders. Only a small percentage of them make it. This is because of a combination of factors such as inadequate knowledge on the financial market and the inability to navigate different market cycles. Being successful takes time and a lot of effort. This article highlights five essential requirements every trader needs to have to have a successful trading career.
#1 – A Trading Platform
A trading platform is very essential in achieving success as a trader. Brokers offer different trading platforms to their customers. As a trader, the platform you use can determine whether you will be successful or not. The most common platform is the MetaTrader 4. This software enables a trader to create models, check breaking news, execute trades, subscribe to expert advisors, and back-test various strategies among others. It has hundreds of assets (or instruments) which traders can trade with. There are a number of benefits of using MetaTrader 4. One, it is the most common trading platform in the market today. Second, it is available in web and mobile devices. Third, it is a very easy to use platform that one can learn within a few days. Finally, it is loaded with various charting tools which enable a trader to create quality models.
#2 – Passion
Passion is another key ingredient to a successful trading career. James Simmons, founder of the most successful quant hedge fund once said that without passion, no one can make it in the trading business. The same applies to all industries. However, in trading, one needs to have a lot of passion because of what is involved. As a new trader, you will need to spend a lot of time learning and practicing bearing in mind that it might work out or not. Also, you need to understand that the market moves in cycles meaning you will make and lose money. Losses are more difficult to bear. Unless you are very passionate, you will not be able to navigate the challenging market environments.
#3 – Trading Environment
To have a successful trading career, you need an excellent trading environment. Fortunately, you don’t need to have an office to trade in. I started trading in my bedroom. An ideal trading environment involves a number of things. One, you need a fast computer. Possibly, you can have two or three screens. The computer should be first because anything can happen within a second in the market. A fortune can be lost if your computer is not very fast. Second, you need a fast internet connection. This will enable you to make quick executions. You also need a credible terminal. Hedge fund and big managers use Bloomberg or Reuters terminals which cost thousands of dollars every month. As a small trader, I recommend that you use various free sources to get your news. I recommend the following: Bloomberg TV and website, CNBC, Wall Street Journal, Twitter, StockTwits, and Investing.com. These tools will give you an excellent stream of financial news. Finally, you need a good broker with a great trading platform.
#4 – Time
To have a successful trading career also, you need to have the time to do it. The amount of time you decide to use depends on your trading strategy. There are traders who believe in spending their entire day trading. These need more time to open and close trades. There are other traders who believe in spending less than an hour doing the actual trading. No matter the strategy you decide to use, the fact is that you need to spend time in the market. Even when you are not trading, you need to know what is going on in the financial world. This will save you a lot of time when you do the actual trading. In addition, you need some time to think about your trades; your losses and wins. Doing this will help you evaluate your successes and your failures.
#5 – Strategy
Finally, you need to have a well-defined trading strategy to have a successful trading career. No trader can make it in the trading business without a strategy. A trading strategy is important because it helps you know when to get in and when to get out. It is also enables you to know when to hold a particular trade. There are many strategies which traders can use. It is also possible for traders to create their personal trading strategies based on their style. Some of the most common trading strategies are: hedging, algorithmic trading, scalping, and long short strategies. The best thing you can do is to take time to develop a strategy based on your preferences. You should then test the strategies to see how they perform in real market situations. If they are effective, you should now use them effectively and change them when need be.