The Path to Trading Success
The path to trading success and becoming a successful trader is an evolution of
experiences, ideas, hopes, and dreams. Sure, individually style, and a dose of good fortune, have a bit to do with
your results, but there are some hard and fast issues that confront every investor. We'll discuss these issues in
this article so you can come away knowing where you need to do some basic work on your own skills.
External Barriers to Trading Success
Before you even get to worrying about the technical and financial aspects of being a trader, you need to
understand the outside forces that are working against you. We call them "outside" forces because they operate
outside of the market. In reality, they are inside forces because they come from within you.
Fear occurs when you are playing with "scared money" or money that you cannot afford to lose. It also occurs
when you have had a long spell of losing trades and you hesitate to make the next one. The best cure for fear is to
make sure that you can afford to lose whatever you have invested. if you can't, then you shouldn't be raiding.
Greed rears its ugly head when you start making trades that you normally wouldn't make just because pf the lure
of "easy money". When you are thinking with the greed side of your brain, the logical side can't communicate with
Lack of Self Confidence
When you don't have faith in yourself, in your decisions, and in your strengths, you are more likely to make
faulty executions, ignore your trading plan, and practice poor risk management. Any one of these weaknesses can
clean out your cash balance.
Failure to Take Responsibility
WHo do you blame when a trade goes wrong? The market? The weather? Your spouse? Your luck rabbit's foot? If you
blame anyone other than yourself then you are not taking responsibility. THe result of not taking responsibility is
that you look to outside solutions rather than examining your own actions and decisions. You can only become better
by making yourself better.
Poor Trading Psychology
Even if you have developed a personal strategies that works as well as can be expected, and you have learned to
manage risk within acceptable boundaries, you must still learn to manage your emotional state if your goal is to
remain consistent. Most of the biggest problems facing traders come from within.
Getting your Gear
If you are going to be a day trader, then you will need a higher level of equipment and services in order to
trade successfully. If you aren't, then here's a rundown of the equipment and software that will serve you
Minimum Hardware Requirements
Any decent modern PC with 256 megs of ram, a monitor, good video card, and an ink-jet or laser printer will
suffice as a PC trading platform. The monitor should be at least 17" and preferably larger. Depending on the type
of Internet connection you want, your PC will need to also be equipped with a network card for broadband access.
Expect to pay in the neighborhood of $1,500 to $2,500 for his basic setup.
Your Internet connection speed is important because you will be spending a lot of time on line executing orders,
confirming trades, reading news, quotes and other market data. You should consider cable modem or a DSL connection.
Expect to pay about $20 a month for regular dial-up Internet service and between $30 - $50 a month for a cable or
DSL phone connection.
Real Time Data
You will want real-time trading information as opposed to 20 minute delayed. Ideally you should subscribe to a
service that provides the following feeds:
- Stock quotes and ticker
- Market averages and indices
- Market news stories
- Price and news alerts
Prices for real-time data vary widely depending upon your vendor. You should expect to pay in the range of at
least $75 to $300 (or more) a month for all of these real-time services.
As you can see, there are many steps to walk along the path to trading success. It's been said
that the longest journey begins with the first step. Put on some comfortable shoes and get stepping! There's a lot
of money to be made out there. Click here for the Sure-Fire Trading Plan.
Next: Trading for a Living