9 lessons from Traders Who Made Multiple 8 figures

2022年12月16日

Hello Traders

Losses

Losses are an unavoidable element of trading, and it is important to understand that they are a regular part of the process.
It's critical to remember that even the most successful traders suffer losses, and how they deal with such losses defines their total performance.

Setting stop-loss orders, which are orders that automatically end a trade when it hits a specific degree of loss, is an important component of loss management.
This may assist traders limit their losses and safeguard their wealth. It's also critical to have a strategy in place for dealing with higher losses, such as reducing transaction sizes or taking a vacation from trading.

To new traders reading this, don't get scared... you're going to blow up your account at least once.

Because, if you never did it, you never experienced how painful that is to lose your gains, initial capital, dreams.

You need to experience that once so that your brain knows you'll never get to that dark place again.

There is no other way, even if you follow guidelines from successful traders... I guarantee you that sooner or later, you'll blow up your account if it never happened to you yet.

Every successful trader I know blew one or more accounts

My wish for you is that it happens early in your trading journey so that the capital loss is small relative to your future potential gains

Discipline

Discipline is an essential characteristic for every trader to have.
Trading can be a turbulent and fast-paced atmosphere, and it's easy to get caught up in the market's enthusiasm or anxiety.
Discipline, on the other hand, enables traders to remain focused and adhere to their trading strategy even when emotions or other events attempt to distract them.

My discipline strategy is two-folds:

1) When I capture a 1 or 3 great intraday moves, I stop for the day. I don't want to give my gains back.
I close my trading station and stop watching the market as I'll always end up thinking "oh it keeps moving, I could have made X USD more"

2) It's being patient as it could happen I'm getting ready to trade at 6 am but nothing happens before 5 pm... leading me to wait wait wait.... for a decent setup to appear.
This is not a natural skill at all, I acquired it

Preparation

Proper planning is crucial for trading success.

This involves having a sound trading strategy in place as well as a clear grasp of the market and the instruments being traded.
It is critical to evaluate and update this strategy on a frequent basis to ensure that it remains effective and current.

Preparation also include maintaining current on market news and events that may have an impact on the assets being traded.

Reading industry journals, following financial news sites, and engaging in online groups or forums may all help with this.

As an intraday trader, I check every morning what are the main events of the day and make sure to not be in a trade or be at least SL/breakeven around macro events such as CPI, FOMC, etc...

Risk

Risk management is an important component of trading.
This involves knowing the degree of risk associated with various instruments and techniques, as well as ensuring that only a suitable level of risk is taken on given the trader's risk tolerance and money.

It's vital to remember that profit potential is exactly proportional to the degree of risk taken.

This indicates that although greater risk tactics have a larger potential for profit, they also have a higher chance for loss.

I'm a risk adverse trader overall... though when I identify a very profitable potential setup... I push on the pedal for real... meaning I increase drastically my position size.

Emotions

Emotions may be the deadliest adversary of a trader.
If left uncontrolled, fear, greed, and overconfidence may all contribute to bad trading judgments.

Meditation helped me a lot for that

It is critical for traders to identify and manage their emotions when trading.
Setting limitations on the degree of risk taken, placing stop-loss orders to safeguard against excessive losses, and taking pauses as needed to clear the mind are all examples of this.

Frustrations

Trading may be unpleasant at times, particularly when you're dealing with losses or a streak of bad transactions.

Traders must remember that setbacks are a typical part of the business and keep focused on the long-term objectives.

Taking pauses, finding support from others, and being disciplined may all help traders get through these trying times.

Being ok with being frustrated is also NOT a natural skill and has to be acquired.
I know now when to label when I'm frustrated and what to do to relax (meditation, stretching, deep breathing, self-massage, classical music, ...)

Frustrations have a compounding effect leading to greater and greater frustrations and losses.

And we get frustrated because... we lost money or didn't make as much as we could...

The richest traders I know are the ones who are able to disconnect completely their trades from the monetary value.
Which kind of impossible when for most 1 trade >= 1 month worth of rent => leads to too much mental pressure and stress.

Failure

Failure is an inevitable part of the learning process, and traders must understand that it is OK to make errors.

What matters is how traders react to and learn from their errors.

It's critical to assess what went wrong honestly and make the necessary changes to prevent repeating the same errors in the future.

Hesitation

Hesitation may be detrimental to a trader's success.

In the fast-paced world of trading, traders who are hesitant may lose out on chances or join transactions too late.

Traders must make judgments swiftly and confidently, while also understanding the possible risks and benefits of each deal.

Journey

Trading is a journey, and traders must approach it with a long-term view.

This entails accepting that there will be ups and downs and being dedicated to ongoing learning and growth.

Setting reasonable objectives and celebrating minor accomplishments along the way are also crucial.

Thank you for reading
David