Becoming an Independent Stock Trader is a tough thing to do. It’s scary because by nature we love to follow and be told what to do. Even if you disagree with what I just said think about everything that goes on in your day. Most people follow the sound of an alarm clock to wake up, follow the time given to arrive on time and follow the instructions of your boss or teacher. You followed your parents for years but now you’re independent. However, you do follow traffic signals, the culture moral code and government laws. If you are religious you are considered a religious follower. Let’s face it following is what we do and it is natural. Without the concept of following we would most likely be lost as a people but that doesn’t mean that you can’t learn to do things independently. One of those things is stock trading. In fact, if you aren’t learning to think like an Independent Stock Trader from day one, you will get financially crushed. If you don’t believe me try to follow this exercise I posted here. If you are successful then I truly do apologize. If you are unsuccessful keep reading.
Education – Choosing an education in the stock market is not as easy as you think. Most educators in the stock trading field only want your business and nothing more. They dazzle you with their education and show you how successful they are with their proven strategy. 95% of them are bullshit artists and that same amount could care less about you and your success as a trader. Naturally you fall for their bullshit, buy into it and go nowhere with your trading career. Let’s face it 90% of traders fail and these educators know this so they shuffle you in with creative marketing and when you almost certainly fail they can just add you to the “90% of traders fail” folder without losing sleep because… 90% of traders fail. I am not saying it’s not a smart move to pay for an education but do it for free first. Most of the people I help get started didn’t even know what short selling was. Reach out to me here if you want to save yourself time, money and headaches and I will be more than happy to get you going in the right trading mindset and journey.
Tip – Listen to your instincts and NO ONE in this game. Period.
Strategy – So many people who have reached out to me over the years all fall for the same trick. Hell I fell for it too. They all think that someone else’s strategy will be the right strategy for You. There are so many things to consider when choosing a strategy. Here are some of the things you MUST consider.
- Does the strategy make sense to you? If you don’t understand it you can’t trade it.
- Do you have the time to trade the strategy when it functions best? If you have a 9 to 5 job and you want to trade the first 5 minutes of the trading day you are looking to trade the wrong strategy.
- Do you have the right tools to trade it? You need the right broker, platform, internet connection and enough capital too begin. If not you can’t trade it.
- Do you like it? If you don’t like the strategy you are trading when you are making money you will HATE it more than you can imagine when you are losing.
Those are some of the things you MUST consider BEFORE you buy into a service or pay for your education. Nobody offers money back guarantee education either. Once you buy a stock trading education system you never get a refund. Most of the times you don’t even get a response to your emails about refunds either but that is a different blog post I will write about another day.
Tip – Put together a pros and cons list of various strategies and work towards perfecting the ones that work best for You.
To Paper Trade or Not to Paper Trade – I once wrote a blog post about not paper trading then when I started doing my one on one Skype sessions to help people get going in the right direction I started promoting the idea of paper trading. Now I say add the 2 concepts together. What does that mean? Good question. Let me explain. In order to become an independent stock trader you must see if a strategy is working for you or not and you need to test it out. However, paper trading will remove the emotional element of fear and greed which won’t be helpful to you in your beginning stages. So, I highly suggest you trade real money but only using a few shares. 5, 10 or even 25 shares isn’t too little when you are considering if something is working or not. Yes you will eat up some commission money but if you are a regular reader of my blog I have already saved you a ton of money. So, put that towards those commissions and calculate your percentage gains or loses for each trade. Here is an example.
Let’s say you buy 10 shares of XYZ at $10 and the stock goes to $11 and your commissions were $4.95 a trade. If you buy 10 shares and then sell 10 shares you have spent $9.90 on commissions which leaves you 10 cents in profit. After taxes .07. I know that number looks pretty depressing. However, if you calculate your percentage increase from $10 to $11 you get a 10% move to the upside. That is GREAT and that is what you You need to focus on.
Tip – I highly suggest you spend several months trading light shares as the market is always changing. If you are successful in multiple market conditions you can start increasing your share size little by little.
Wait Wait & Wait – You must learn to wait for your set ups to form. Let me say that again.
YOU MUST WAIT FOR YOUR SETUPS TO FORM
That should be loud and clear now.
You must wait for your setups to form or you will be sorry in the long run. From time to time I get into a trade too early and have to sit with a bit of pain or get stopped out because I had a fear of missing out. You must wait… You must wait… YOU MUST WAIT.
Trust me I am writing that message for me as much as for you. When I first started being an Independent Stock Trader I had issues with waiting but thankfully I have gotten so much better at waiting for my preferred setups. However, it never hurts to remind yourself to be patient.
I have to say that 9 out of 10 times a stock sets up the way I like it but it doesn’t always happen exactly when I think it will. Sometimes you have to wait minutes, hours, days or even weeks for a move to set up. If you are patient you will be rewarded greatly because even if you are wrong your risk will be less than if you rushed to trade.
Tip – If your preferred setup hasn’t formed then don’t trade. Not trading is just as good as trading successfully.
Trust Yourself – I had a guy email me recently and in his email he had all the right answers but he just didn’t know it. I could tell he was very knowledgeable and had done the necessary work to get going on his trading journey. So, I responded with an email that said to trust yourself in your journey of being an Independent Stock Trader. His response was THANK YOU!!!
Our gut instinct is our best protector. Do your work, educate yourself and listen to your gut. Yes you are going to make mistakes but if you don’t trust yourself you will never succeed. In fact, you will inevitably fail.
Tip – Not to sound redundant but… Trust No one in this game. Period.
Want to save yourself time, money and headaches in trading? Email me here and let’s get you going in the right way without the BS.