Here are the Ten Facts One Should Know before Starting to Trade
1. There is no single trading system or philosophy that is right for everyone. There are successful traders out there who mostly use fundamental analysis, while there are others who use only technical analysis or a combination of them both.
2. You should match your trading method to suit your personality. Having said that, there is no single right way to trade the markets, you have to know who you are before choosing an approach that fits you. For instance, if you don’t like or don’t have the time to watch the markets several times during the day, then a day-trading style is not for you. If you can’t stand the volatility of riding big trends with their inherent retracements, then a long-term trend-following system won’t suit you.
3. Your chosen trading method must have an edge. Otherwise, all the discipline and money management skills in the world will only guarantee that the account will gradually bleed to death. If you don’t know what your edge is, then most probably you don’t have one.
4. It takes time to become a successful trader. Just as it is in any other profession, you need experience acquired in real-time. No one considers himself a successful doctor because he read a couple books and then operated on a dummy, or an accomplished lawyer after watching several episodes of Perry Mason.
5. You need to do your own thinking. Listening to others and acting on tips instead of following your own trading plan is a recipe for disaster. Successful traders follow what the market is actually doing and ignore all the outside noise.