14 Mar The 4 Rituals That Can Help You Become An Expert Trader
One of the most prominent psychology books from the last decade is ‘Outliers: The Story of Success’, written by Malcolm Galdwell. In his book Galdwell contends that to become an expert in any particular skill, you need to practice that skill correctly for approximately 10,000 hours. While the book is certainly an interesting read, I disagree that you need 10,000 hours and believe it could be significantly less. With this in mind, here are the four rituals that can help you become an expert trader.
1 Find A Mentor – a mentor is someone that can share their insights and guide you towards achieving a clear goal faster than you would be able to achieve on your own. They are well placed to help you systematically improve in certain areas, and help you mentally visualize the correct approach to trading. Not only can they help you avoid making amateur trading mistakes, but their wisdom extends from the fact that it is something they have done before. Who better to learn from than an expert in your field?
2 Try Different Trading Strategies – to become an expert trader, you cannot afford to stick with one strategy. It’s important to be able to adapt to the market conditions around you. Markets are consistently evolving and changing, whether it be due to economic factors or the advancement of technology – for example, computerized trading. If you stay with one strategy you might find success at different periods in your career, but it won’t be enduring.
3 Practice, Practice, Practice – the skills to trading don’t come from reading a plethora of books. You need to consistently practice by trading and learning from your experiences. At the end of the day, books will only equip you with the theory component of becoming a trader – the ‘know how’. Much of what you need to succeed can only be learnt once you put in the hours behind the screen, and most of all, learning from your mistakes.
4 Look At The Past To forecast The Future – your prior trades are one of your most valuable currencies. Review your previously successful trades, or study charts to identify patterns. While the past is not necessarily indicative of future performance, it can certainly give you some guidance as to how things could play out in the markets as generally markets repeat themselves in cycles.