If you know the problems of trading, you can simply avoid them. Little mistakes are inescapable , for example entering the incorrect stock symbol or wrongly setting a buy level. But these are excusable, and, with luck, even profit-making. What you have got to avoid nonetheless, are the mistakes due to bad judgement rather than straightforward blunders. These are the lethal mistakes which ruin complete trading careers rather than just 1 or 2 trades. To avoid these problems, you have got to watch yourself closely and stay tenacious.
Think about trading mistakes like driving an auto on icy roads : if you know that driving on ice is threatening, you can avoid traveling in a snow typhoon. But if you do not know about the hazards of ice, you could drive as though there were no threat, only realizing your mistake once you are already off the road.
Too many traders are fixed on just one market. They may trade only the currency exchange $ / EUR, or the E-mini Russell, or the E-mini DJX , or simply certain stocks, for example. While they may feel a certain sense of experience or mastery over this one market, nobody, irrespective of how experienced they are can envision what will occur all of the time. These folk are setting themselves up for disaster, as there will necessarily be a time when they will make a howler. And, with no variety in their trades, they can lose everything they have worked so very hard to gain.
The key to selecting a market isn’t to have a look for one you appear to understand better than the others. That will be something of an illusion. But there’s one market you can always depend on : the one that’s moving. You know that you should buy when the market goes up and sell when the market goes down. A moving market will be moneymaking, whether or not you have never traded a single share there before.
Pay close attention to trendlines, both in the markets where you’re already trading and the markets you’re considering. If one of your markets is consistently choppy or just moving sideways, get out of it and move on to another. If you think of successful trading as sticking not with a market but with a trend, no matter which market it’s in, then you’re thinking successfully.
The key, naturally, is you have got to keep a watch on markets where you are not currently trading. Staying abreast of your options is of equal importance as watching what you are acquainted with. Here’s where research and experience come into action. Becoming familiar with several markets ( and the way to learn about them ) requires time. But don’t allow that to deter you. Also, do not feel like you have got to understand each option at the beginning. Pick 1 or 2 different markets to literally trade in, but also select a few solely to watch. That way, you will see how your own trades work, and you may compare that activity to markets you may not know about ( yet ).
The only real way to find out about which markets are wrong and right for you is to observe them. Watching a selection of markets will give you the knowledge you’ll have to use when it is time to change gears and find that evasive moving trend.
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