How To Set Yourself Up For Trading Success
A wise man once said, “Luck is what happens when preparation meets opportunity”. However, many unsuccessful people seem to think luck is just something that happens by chance. To the unsuccessful person who is just hoping to “get lucky” and hit it big, it may look like a successful person is “just lucky” but that does not tell the whole story, not even close…
‘Behind the scenes’ of any wealthy or successful person is thousands of hours of hard work and repetition. While the poor man was playing video games or binge-watching Netflix, the rich guy was putting in the ‘hard yards’, doing the ‘boring stuff’ that most people don’t want to do or that they make excuses for not doing.
Today’s lesson is all about how to put yourself in position to make money trading, about how to set yourself up for trading success rather than leaving it to chance. It’s not just going to happen because you want it to, I can tell you that for a fact. YOU must make it happen by proper preparation and effective routines. You have to love the process, love the routine, once you do that you will be well on your way to trading success.
Once you do the homework and have put in the ‘hard yards’ and your mind is aligned for trading success, when the proper trade setup comes along, all you must do is put the bullet in the chamber, so to speak, and fire away.
Your goal as a trader (or with anything really) should be to work so hard and be so dedicated to mastering your craft, that when the perfect opportunity comes along, you hardly even have to think, you literally just execute the plan. You can nail this down all the way to the expectation of the trade. Win or lose, you can know what to expect before you pull the trigger. Doing this, will allow you to eliminate fear and other negative emotions from dictating your behavior in the market.
Be CRYSTAL CLEAR about what your trading edge is!
It’s commonsense to say things like “If you don’t know what you’re looking for you will never achieve success…” but SO many traders start trading live with no real concrete trading strategy or trading edge. They literally don’t know what their trading edge is.
Obviously, you must pick a strategy, a trading edge – something that gives you a high-probability entry – and learn to trade it before you can really do anything else. Many people simply don’t even get this beginning part right. They switch from method to method, never really mastering one and they end up with a hodge-podge of ideas that they call a method. Usually this means their charts are plastered with multi-colored indicators, which really means they are just confusing themselves.
The entry is simple, perhaps the simplest part of trading, so don’t over complicate the trading process. I teach a number of high-probability price action patterns that you can use to enter the market from. Now, a high-probability entry doesn’t mean a guaranteed win every time. It just means that over a large enough series of trades, that edge will give you a better than 50%-win rate, which really is all you need if you’re managing your money right and not over-trading.
I have written multiple lessons on how to master your trading strategy, so check those out if you haven’t already. Remember to “keep it simple stupid”, and don’t think too much about this very elementary aspect of trading. All you’re doing is finding a repeating pattern in the market and using it to enter, it’s not rocket science, but it does require discipline. The biggest thing is finding your favorite price action pattern and committing to master it and to NOT trading if it’s NOT present! This is the first step to getting yourself into position to make money trading.
Develop a trading plan and routine
Boring, right? I know that’s probably what you thought when you read the words “trading plan and routine” above. But, if you read this little section you will be light years ahead of most traders…
Guess what? Boring stuff is how you make money, how you get rich! One big problem with our current society of constant iPhones in our faces is that everyone seems to need everything to be a blue-light filled screen in their face all the time or they think it’s boring. Well, do you think Warren Buffet or Bill Gates or even Donald Trump got to be where they are by playing video games constantly or watching T.V. all day? No. They learned to love the process. They found what they loved, and they GOT INTO IT hard core. They didn’t whine about the boringness of routine and processes, they made themselves love them because they knew if they did that, the money would come. A funny thing happens when you do this, along the way, you ACTUALLY start to enjoy the process and it stops becoming something you have to force yourself to do, you just start WANTING to do it.
This is about turning your trading strategy / edge from the first sub-point above into a ‘bite-size’ trading plan and routine that you can really dig into and start implementing. You can and should write this out and read it every time you plan on looking at price charts.
Your goal is to be following an objective plan that allows you to approach trading from a calculated business perspective, rather than a random ‘shoot from the hip’ gambler mentality that most traders end up with.
Once you have your plan and routine written out, start practicing it everyday by demo trading on real-time market conditions or even trading with VERY small amounts of money. Ideally you will demo trade for a few months then start risking VERY small amounts of money until you are seeing consistent success with what you’re doing.
The goal is to learn to trade your chosen pattern / method so well that all you are really doing is checking in with your plan, following it to the T and then checking the charts to see if the conditions are ripe for a trade. The conditions are defined in your plan. If you do not see those conditions you go away from the charts until the next scheduled time to check them. If you do see a trade that meets what you’ve pre-defined in your plan, then you simply execute the conditions of the trade, which typically means:
- Identify best stop loss placement
- Calculate position size that maintains your pre-defined 1R per trade risk amount
- Identify profit target of 1:2 (or better) ideally.
- Set the trade and forget it.
This is the second step in setting yourself up for success in the markets.
Master yourself to master the markets
The ‘glue’ that will allow you to do Step 2 above, is mastering yourself, mastering your own mind and therefore your behaviors in the markets.
Setting yourself up for trading success is about getting into the proper trading mindset and perhaps what’s harder, staying in that mindset. Most people can get into the right mindset and stay disciplined and focused for a few trades, but it’s often the results of those trades that throws people out of whack. They start getting emotional; over-confident or afraid, depending on the result of their last trade. Don’t allow this to happen to you. Stick to the plan, to the strategy you have mastered. If you feel yourself getting frazzled then just read your trading plan again and take some time off from the markets to regroup, you will come back refreshed and re-focused.
Discipline, patience, overcoming mental hurdles, sticking to routine, understanding that your mind is the key. Mastering your mind is how you master the markets, and this is the glue that holds all of this together and that allows you to stay positioned to take advantage of obvious price action setups when they form in the market. This is the third step to setting yourself up for trading success.
There are a couple of very key aspects of money and money management that I want to discuss briefly. The most important parts of managing your money as a trader are controlling your per-trade risk (1R = risk amount per trade) to a 1R dollar amount that you can realistically lose on any given trade without it affecting your personal finances or trading mindset.
The other big part of money management is not over-trading. Whilst this isn’t directly money management, it is in the sense that if you are over-trading you are also risking too much money and thus putting yourself into a position to become emotionally ‘charged’ if you do lose.
You should aim to be a low frequency trader who only trades when conditions in the market are favorable and match with what your trading plan says. You should only risk a dollar amount that you’re totally OK with losing on any given trade. If you do these two things, the rest will almost take care of itself.
There are basically two parts to setting yourself up for trading success: The ‘work’ of learning how to trade the market and then the implementation of your trading plan. You want to break both parts up into smaller and smaller chunks that you can more easily ‘digest’ and understand.
Once you have become crystal clear on what you’re looking for in the market and devised a trading plan and routine, it just becomes a waiting game. Sitting and waiting is mostly what successful traders do. You should be out of a position / flat the market more than you are in a position, if you’re doing that then you’re on the right track. There simply aren’t very many high-probability setups per month that are worth risking your hard-earned money on. So, if you find you’re trading all the time, you are just gambling.
Setting yourself up for trading success means that you have done the work so that you will be prepared when the opportunities on the charts come along.
Proper preparation starts by learning, either from my trading course or elsewhere, but whatever you do, remember: Success (or luck) is what happens when preparation meets opportunity.
What did you think of this lesson? Please share it with us in the comments below!
44 Comments Leave a Comment
Felt that all true!!
As a beginner, this is very enlightening, thank you.
I could learn so many new ideas from here. Thanks a lot :)
awesome write up very straight and precise.more strength to your intellect.
this is mind blowing, I’m really learning here. thanks so much for the knowledge.
Nice as usual… will keep following u until i have the money to register for your life time course
you are the pro… with sincerity
sweettt, knowing when to pull the trigger!
That was a good one, Nial, it reminded me of the principle problems I have: not sticking to my rules!
Thanks Nial, This has been a sobering view of risk and a smart approach to the market.
That was very informative, thank you so much. I always follow your topics, they are enlightining.
I always repeat : I can do what anyone can do . But after reading any of your great articles ; I repeat : I can do what Mr. Nial can do .
I always enjoy your newsletters so informative.
one day i will be like you. SALUTE YOU MY MENTOR !
Very enlightening article.
It is worthwhile message for true traders. I. Cherish it
Crystal clear as usual. Thanks again, Nigel Harvey
Yes, the key to success is hard work and devotion. We should repeat it all the time. As antient Romes said: “Repeticio mater studiorum est!”
Thanks Nial. Really enjoying your articles and your price action strategies, glad i found this sooner than later.
This would have to be the best summary of trading I have ever read. Its all there follow the steps and don’t think it will happen over night but Its perseverance that gets you through. Great stuff Nial
One thing that is really difficult is stay waiting when the oportunit does not show up and you see the markets still moving. To imagine others traders making money in those oportunits, lets you thinking: “When is going to be my turn?”
I know that is a tought we have to avoid, but it is so hard to let it go.
Thanks for the article Nial.
Thank you Mr Fuller
Great article, its always wise to know what you looking for in the market, its makes the trading process easy.
This lesson is a great master piece. It has helped in a great deal to shapen my trading mindset. THANK YOU
Thanks Nial Today’s lesson was very important and informative. To become a successful trader or in life you need to be prepared for opportunity. Having a plan and a routine is important in trading
Great thoughts, deeply appreciate.
thank U verry much Nial for your article advis
I have been trading or being on and off the game for at least 6 to 7 years now, and I have tried all the time to set up what is called a trading strategy. Maybe it’s my luck through reading of various articles, now I have I mind map of how to formulate the plan, I must say you have also indicated some of my biggest mistakes while I was trading, in short you have just put me in the right mind set, and I can’t wait to setup my plan and get the hard work done. Thanks a lot Mr fuller
Who better if not the Priest himself. Thanks Nial, you are the best.
Fantastically on point……………You simply personify Price action trading……………..Continue giving us more, God bless you
It was great lesson for how looking for luck and i learnt what i was looking for. thanks
Awesome. I like the part about the process and to continually trade using it. No matter what.
Thanks nail for such a awesome article.
This lesson has pointed out indispensable facts on becoming successful/ making great achievements in life.
Thanks a lot for your efforts in helping humanity.
Again GREAT, GREAT, GREAT article.Thank you.
Thank you Nail.
Your teaching style is just the best in the whole world, I wish to have you as my mentor!
Quite educative, thanks .
Thank you Nial for this article.
That was so educational Nial
following it to the T——-what’s the T mean?
To Delve deep. i.e to do something with a sickening determination that you leave nothing hanging but have a religious type of commitment towards that which one has find definite purpose for and that one will gain from that which one is taking control for one’s ends that one desires.
awesome advice. thanks nial