How I became a successful trader
When I began trading, I didn't know anything about the markets or about any kind of trading strategies. In the very beginning I was just trading free Signals from IBTimesFX; but I found out after some time past that I don't like their style of trading. I needed to learn that Trading is something very individual. You cannot trade the style of another person with success. You can trade only your own style successfully.
So, I was thinking a lot about my own trading style and began more and more to set up a trading plan which fits my own personality. When you see that plan you need to be careful. Learn well, but don't learn too much. The trading plan is a mirror of my own personality, so you cannot use it for your trading.
I divided my trading plan in three categories:
Data are important in order to take a trading decision. In this category I have for example all my technical indicators. They help me to decide if we are in a trend, and if the trend is up or down. I am using always the same indicators:
- Moving Averages
- T_S_R Big Trend
I decide the direction of a trend on both the one and the four hours chart. Both need to match.
I am working as an editor with the International Business Times. From around 08:00 until 18:00 I am very busy with my work and I don't have much time to watch the charts. Therefore I decided to have a trading strategy that doesn't absorb me the whole day.
I am using in the moment two different strategies. One is a Swing Trading Strategy the other one is a Breakout Strategy.
For my Swing Trading I am using the Pivot Point as an entry. According to my trend analysis I open a buy order in an uptrend and a sell order in a down trend. The Swing Trading allows me to concentrate during the day fully on me editorial work for IBTimes. I don't worry about my pending orders. I just let them be during the day.
For my Breakout Strategy I figure out the high of the last 24 hours in an uptrend, as well the low of the last 24 hours in a down trend. This point I use for my entry. The Breakout Strategy also allows not looking at the chart all the time.
So, this is actually quite simple, figure out the trend, and opening pending orders. I guess every one can do that. What trading makes very unique is the required discipline that every trader must have.
In Trading it is essential that you do every day the same. You need to follow adamantly your trading plan. Your trading plan is your business. If you don't follow your trading plan in EVERY SINGLE trade, you don't need to trade. If you trade with discipline you will succeed. If you don't trade with discipline you will not succeed.
In your trading plan you need to decide clearly what you trade. Do you trade Forex, Commodities or Equities? Best is not to trade everything at once. I trade only the major currency pairs and some of the crosses. All together I have not more than 7 pairs on my watch list.
Some days are very hart, because none of my trades is making profits. All of them are losing. But this doesn't happen very often. And I am always trading with a positive risk reward of 35 Pips Stop Loss and 55 Pips Take Profit. This allows me to lose half of my trades and stay profitable. I know well that I am not able to predict the movements of the markets. I guess no one can do that. Otherwise we all would easily become rich. A successful trader is not the one who can predict the future, but the one who have a lot of discipline. Even though I lose sometimes I don't give up, I don't kick away me trading plan, but I keep on trading every day. During my trading I needed to learn one thing: If half of my trades are winning, and the other half is losing, that means that I have a perfect trading strategy. There is no need to look for a Holy Grail, because there is none out there. The only Holy Grail existing is my own discipline.