As many of you will know my personal bête noire is that in order to become a successful trader you must first find somebody that can be proven to make money from trading and simply ask them how they do it. Better still is to ask them to become your Mentor. This is exactly the path I travelled when I first started trading over 30 years ago. If you try and succeed in this business without any assistance or help from knowledgeable proven traders it can be such a long hard struggle.
One of the biggest mistakes new traders make is that they fail to differentiate between the marketing men and their paid actors and real life real money traders. If you take advice from a man who is simply pretending to be a trader don’t be surprised if you fail. The vast majority of courses, seminars and systems are produced and sold by exactly those sorts of people.
Indeed I personally think this is one of the main reasons why the success rate in trading is so low because so many people are being taught methods that simply do not work by people that cannot trade. Honestly that is the simple truth.
I realise that not everybody can afford a personal trading mentor however we can all afford to read a few books from credible sources.
Consequently I recommend that you read books written by or about proven successful traders as you will almost always gain something of value from each experience.
Most of you will have heard of “market wizards” which is a great book of interviews with some of the world’s very best traders. We can all learn much from reading this sort of quality material. Another less well-known book which I like a lot is “market beaters” . It is similar to market wizards in that it contains a series of interviews with real money real-life successful traders – well worth the price.
It is not that they will teach you how to trade but what they will do is show you the thought processes successful traders go through and also put you right on a few common misconceptions that novice traders have about trading.
What I have found in over 10 years of training traders is that one of the biggest problems is that those that cannot make consistent profits almost invariably do not have the full picture – yet they believe they do ! A classic case of the dreaded unknown unknowns that I often refer to.
This is often because they make the common mistake of believing that something that this is endlessly repeated from different sources must be correct. This would only be the case if the sources themselves are credible and the problem is the vast majority of sources are not.
How many people for instance do you know who can prove they actually make money from using RSI or MACD – me neither ! yet it is endlessly repeated that “this is the way to trade” – by people that never prove they make a cent from trading themselves.
An analogy I like to draw is that most unprofitable traders are simply stumbling around in a darkened room bumping into and tripping over all the furniture whilst trying to find the door. If they could call upon somebody to simply turn the light on in the room then everything becomes much much clearer – once somebody illuminates the room you can then see the task ahead of you and confidently and decisively move in the correct direction whilst avoiding all of the obstructions. That is what speaking to or reading words written by real life traders can bring to your trading – they will illuminate the room for you and in so doing show you where the obstructions to be avoided are and what is the simplest route through the obstacles.