From our Littlefish FX trading mantras to words of wisdom from some of the biggest trading successes, here are the 5 Trading Rules You Need To Know if you want to be a profitable trader…
1. There’s no shortcut to trading success
Take it from James Harris Simons…
“Successful trading is a teachable science, not an innate talent.”
Simons is the founder of Ren Tech, father of Quant trading and one of the world’s smartest millionaires – so if he says successful trading can be taught, we’re not going to argue! For more Jim Simons wisdom, read Littlefish Legends: #3 Jim Simons here.
The key point here is that there’s no shortcut to trading success (sorry, but it’s true). That’s why it’s important to start from the bottom and learn what you need to know to become a profitable trader. You’ll hear about promises of “quick wins” and “fast money”, but these claims sound too good to be true because they are.
Looking on the bright side, this means that as long as you’re willing to put in the graft and learn the ropes, there’s every reason you can expect to have trading success.
Whether you’re starting out in the world of Forex or you’re ready to move on to more advanced techniques, our Forex Trading Course has everything you need to become a trading shark – trading plans, strategies and market-leading indicators worth £2,500!
2. Fail to plan, and you plan to fail
As Warren Buffett puts it…
“Risk comes from not knowing what you’re doing.”
The Wizard of Ohama make an important point (that’s why he’s not only one of our Littlefish Legends but also a regular feature in our Words of Wisdom series). Knowing what you’re doing is helpful in any avenue of life, but it’s vital when it comes to trading.
Never trade without your trading plan to hand – and make sure you stick to it. It’s all too easy to let your emotions get in the way when it comes to trading and find yourself getting carried away. But if you keep your plan in front of you, stick to your rules and keep your main goal in sight, you can stop your trades from running away with you.
That’s why we devoted a whole chapter of our Forex Trading Course to developing a trading plan that works – and we’ve also thrown in some step-by-step downloadable PDF trading plans you can instantly use within your trading.
3. Make sure you have the right tools
So you’ve learned the basics and you’ve made a plan – you’re good to go, right? Well, not quite.
You wouldn’t try to knock in a nail without a hammer, so don’t try to make your fortune without first considering your tools. First up, make sure your tech is looking ship-shape with our Best Tech and Apps for Traders in 2015 – it’s the equivalent of making sure you had the best-equipped pencil case on the first day back to school.
Then it’s time to think about your indicators and strategies. Check out our Top Four Must-Have Forex Indicators in 2015 for all the indicators you need (a chance to try them COMPLETELY FREE for 14 days!) and then give the Six Trading Strategies You Need To Try a whirl.
4. Don’t get too confident
But don’t be afraid of being wrong, either. You’ll never be right 100% of the time and if that’s your goal, you’re setting yourself up for failure. The problem with both overconfidence and not wanting to be wrong is that they will prevent you learning from your mistakes and moving on from them. Think like Bridgewater Associates founder and Littlefish Legend Ray Dalio, who says:
“Remember that mistakes are one: to be expected; two: the first and most important part of the learning process and three: that feeling bad about them will prevent you from getting better.”
Own your mistakes, learnt what you can from them and then onwards and upwards.
Of course, that can be easier said than done. So we’ve rounded up some inspiring quotes from some of the biggest names in business and trading (who’ve all made mistakes) for days when you need a bit of a boost. Check them out in our Words of Wisdom series.
5. Consistency is key
One of our trading mantras here at Littlefish FX is that consistency is key – and it should be up there on any traders’ list of rules to stick to.
Like we said above, you’re never going to be 100% profitable, but put together these five rules, make sure you know your stuff, get a good trading plan in place, employ the right tools and keep the right attitude towards trading and you can aim to be consistently profitable!
For more of the Littlefish FX teams’ trading mantras, wise thoughts and occasional rants, follow us on Twitter @LittlefishFX, CEO Sam Barry @LFXSam and Forex Analyst James Harte @LFXJames. And if Twitter’s not your thing, ‘like’ us on Facebook.