10 Steps To Become A Trader

Estimated Reading Time: 6 minutes

These days there are many people who want to become a trader.

But as you know, it's not that easy!

Every day I am getting emails from traders who tell me that they have invested a lot of money on systems, strategies and courses, spent countless hours in front of their screen staring at charts.... and yet they still struggle to make a living with trading.

How can that be, if these days there are so many "experts" and "gurus" willing to share their "trading secrets" for only a few dollars?

I don't know about you, but I am getting emails EVERY DAY about the new "secret system to making money", trading robots and all this other stuff.

Here's why more traders are struggling than ever before:

They are infected by a "mind-virus!"

A mind-virus is an infected way of thinking that causes traders to unknowingly take self-destructive actions. And these self-proclaimed "trading gurus" are taking advantage of it. The way how they "teach" people to become a trader, real success remains outside the reach of almost everyone - no matter how strong your desire, how hard you work or what resources you start with.

You'd think that eventually traders wake up, stand up and say "Hey! Anybody noticed this isn't working?" - But they never do, because they are already  brainwashed by a multi-billion dollar industry and have been infected by the mind virus.

If you want to become a trader and achieve the success, wealth and freedom you desire and deserve, you are going yo have to make a shift! You are going yo have to change your approach.

  • Stop believing that you can buy a system that makes money all the time!
  • Stop buying "magic black-box indicators" that are supposed to tell you the next move of the market!
  • Stop buying into the hype that "the answer to your problems is here, just buy this course!"

Trading is a business. It's a profession. And like any other business it needs planning. STRATEGIC PLANNING.

Here is a SYSTEMATIC WAY to become a trader:

  1. Decide what kind of trader you want to be
    Do you want to be a day trader or a swing trader? Do you want to trade stocks, futures, forex or options? Do you want to use fundamental analysis or technical analysis? Do you like to rely on chart patters or on indicators? - There's no "right" or "wrong" way to trade. Every trader is different. For some traders day trading is easy. Other traders don't like making quick decisions and rather take time to analyze the charts in the evening.
    Note: THIS is probably the most important step! - So make sure you know what trader you want to be.
  2. Find a strategy that suits YOU.
    There are thousands of profitable trading strategies out there. But you have to find one that works for you. As an example, if you like a high winning percentage, you should consider a scalping strategy like "The Seahawk Strategy". If you are looking for a trading strategy that takes advantage of trends with a smaller stop loss than profit target, then you need a trend-following strategy like "The Simple Strategy". Make sure that the trading strategy fits YOU, otherwise you'll never have the discipline to follow the rules of the strategy.
  3. Get a charting software and a trading platform
    Once you completed the first two steps, you can now select a charting software and a trading platform that supports YOUR trading style and YOUR trading strategy. Don't do it the other way around! I've heard from many traders who FIRST select their charting software and then wonder why you can't display the indicators or time frames that your trading strategy demands.
  4. Practice the trading strategy
    Never ever trust ANY performance statistic unless it's your own! You need to practice the trading strategy that you selected for 3 reasons:

    1. Make sure that you understand the rules and can EXECUTE the strategy.
    2. Make sure you're comfortable with the strategy.
    3. Make sure that the strategy is actually making money!
  5. Learn chart reading to improve the performance of your strategy
    A trading strategy is either trend-following or trend-fading. To date I haven't seen a "hybrid" strategy. A trend-following strategy performs well in trending markets, but has more losing trades in sideways markets. Therefore it's important that you practice your chart reading skills to easily identify whether the market is going up, down or sideways. Trade a trend-following strategy like "The Simple Strategy" in trending markets, and use a trend-fading strategy like "The Ping Pong Strategy" in sideways markets.
  6. Understand money management
    It is a proven fact that without proper money management you can lose money despite having a profitable trading strategy. You MUST understand money management if you want to become a professional trader. You might have heard of Larry Williams, who turned $10,000 into $1,000,000 in only 12 months. I asked him about his secret, and he said he couldn't have done it without flawless money management.
  7. Create your trading plan
    There's a huge difference between a trading strategy and a trading plan (check out my other blog post for more detailed information).
  8. Execute your plan on a simulated account
    Yes, a simulated account is not the same as trading with real money. But if you can't make money on a simulator, chances are slim that you will make money on a real account! Take your time and practice your plan. Make sure that you make consistent money on the simulator before committing real money to trading.
  9. Execute your plan with real money
    Start small - grow big! Even if you already traded larger size on a simulated account, start with the smallest number of contracts or shares possible when trading real money. Keep in mind that trading real money is different than trading on a simulator. Fills will be different, and you might experience some emotional pressure. Make sure that you still make money on a real account before increasing your position size.
  10. Use money management to grow your account
    You can't trade small lots forever! If you want to become a trader and make a living trading, then you need to increase your position size. But as I said earlier: Without proper money management you could lose money despite having a profitable trading strategy, so make sure to apply solid money management to grow your account.

As you can see, there are no shortcuts!

It's not easy to become a trader. It's hard work. And I'm glad it is, because otherwise everybody and his grandmother would do it. Trading is a profession. It requires hard work, lots of practice but most importantly: a systematic approach how to become a trader.

Hope this helps. If you'd like more information on how to become a trader, check out our training video "Mind, Method, Management - A Roadmap For Trading Success"

Leave a comment below! - I'd love to hear your feedback.

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Leave A Reply (16 comments so far)


  1. jose
    2 years ago

    Hi Markus
    Thanks for that article very informative and true; during my time as a trader I have learned that although trading is simple, for some people is a nightmare, but the main reason is attributed to the lack of education in that matter, that of course it would happen in any field of business; if you don't know the pros and cons of the busines you want to deal with you will fail and trading is the same. Thanks again, good advices and tips are welcome.

    [Reply]


  2. Vijay R
    2 years ago

    Hi
    Nice, a great article. most of people I experienced that trading with scalping strategy with higher lots and exit the trades with very small profits, I have seen their performance( live) and real statements too. made amazing profit in a very short time period. example: A trader made 6800$ into upto now 250k$ in 3-4 months only used scalping strategy... without using stoploss... and higher lot... can any one guess his strategy made real performance.I am really surprised with it...

    [Reply]


  3. snsayan
    2 years ago

    Markus,

    Excellent article. eye opener for many traders looking " magic systems".

    if some thing exists why then can sell double or triple your money systems for $ 48 to 50.

    [Reply]


  4. wer1
    2 years ago

    indeed!!!

    [Reply]


  5. Laszlo K.
    2 years ago

    Hi Markus,

    I am making real money with strategies from you. Thank you!
    The only thing I would do differently is that learning about Money Management at the very beginning. When I repeated (!) your trading video about that $100-200 per week can grow an account up to 5+ times of it per year I finally got it!
    Now I don't rush to trade. I make some hundreds per week and recently increased the lot size with one. It is like shifting gear. I haven't change anything.. and I am very anxious to do exactly the same like before.. and I make more :) MM with consistency is probably the most important part of becoming a trader.. I think.
    Sharing your thoughts and possibly a short video about the MM you use could be mind opening for those struggling with overtrading and forcibly trying to multiple the number of successful trades.

    All the best,
    Laszlo

    [Reply]


  6. Gonzalo
    2 years ago

    Hi Markus, true story for me, I have been trading your strategies on the markets you do for the first year learning those ten points. Since november 2011 am only trading the DAX future with a modified simple strategy and in this full year to november 2012 I have made money, not quite what i need but being my second year i am very satisfied. I started with 1 contract, am now on 3 contracts and about to go onto 4 contracts. Am following all 10 points in my trading.
    Tx and rgds

    [Reply]


  7. akshaya
    2 years ago

    I have been searching net about 8 hours to learn different methods on trading daily but found that on a same situation or everything being the same different gurus advice strategies which are contradictory . and hence not to be believed.The socalled educatores only trying to make money by fooling novice traders.
    But your strategies are very simple and practical.I have tried them and found to be working.I have not purchased any course from your institution but your free materials are enough for a new trader to make money out of market. Thank you . My best wishes to you and all the team members of Rockwell Trading.
    Akshaya Kumar Mohanty
    India

    [Reply]


  8. P.L.
    2 years ago

    Thank you very much for the blog! Simple yet very true. I have lost money trading and I am not going to lie about it. Most people would have quitted, thinking it is very risky and I don't blame them. For me, I just feel that it is worth keeping on it. So now I am trading with paper money and working on my discipline. It is a really personal experience, so far. Very true, everyone has to find the approach that fits individually. For me, I feel like I am practically a sport right now. The more I practice, the better it get. Hope that is true.

    [Reply]


  9. Richie
    2 years ago

    I agree pretty much with what you have said. However, I have a disagreement with number 10. You say use money management but, increase position size? That is nonsense. If you have a small account, say $10,000 and you trade a good portion of it, say $4,000. Even with a good money management account will destroy you pronto! You do not increase position size just like that. You risk only 2% which is $200 per trade. Position size increases naturally out of your success in trading. If you grow that account to $20,000 for instance, your 2% would now be $400 per trade and
    you did not increase your risk exponentially like you are implying. Instead, your account size rose
    as consequence of your success!

    [Reply]


  10. lloyd russell
    2 years ago

    There are people out there who promise you that you can win 75% of the time and sell you a system for $5000 without telling that you will have to pay a monthly fee to get the signals and that making winning trades is only half the story. This claim is not even true. They take adVANTAGE of you at that POINT in your trading and then laugh all the way to the bank. Don't buy from them. I was suckered in and lost my $5,000.

    [Reply]


  11. Mike Wolski
    2 years ago

    Very good job putting it all in perspective. I am someone who is aspiring to become a great trader. In all my reading and researching on the profession, I find this a very fascinating way to make money. I do see that there seems to be only one primary motivation for people coming into this camp. The greed for money. Simply buy and sell at the right time to make more and more money. Sounds simple for anyone to do. But, your right, it's a business. And anyone in a successful business needs to be smart about every aspect of it. And they usually are. It is a shame that those who come into the business just want to get rich quick, without the effort that it takes to become very good at it. I, myself, love the nuts and bolts about it...statistics, probabilities, understanding the movements of securities, even figuring out the whole guessing game, given all the data compiled. It sounds FUN!! I'm on that side of it, than the getting rich part. I just want to thank you for being there for me with so much sound advise, like this great article!

    [Reply]


  12. Magdiraid
    1 year ago

    These are the things which every trader must have. Some of them can be controllable other must not leave it to emotion. I thing must of traders knew about these. However, to collect them just the way you did is amazing. Thank you for your help

    [Reply]


  13. Asif
    1 year ago

    Excellent, you have explained real facts for profitable trading.I like your blogs.

    thanks.

    [Reply]


  14. Dan
    1 year ago

    Hi Markus, a good roadmap, but how do we choose? In many years studying this game, I have come to the conclusion that the main issue is self knowledge. I was very successful in business, but at trading I am at best, mediocre. I think it is down to the difference between organising and directing others, compared to organising and directing oneself. These are surprisingly different. We have all heard about self discipline being the key, but I have found that this is not atall straight forward. What I am working on is to design a trading plan that fits my personality. The more discipline thats required, the less chance there is of following it. So what are the aspects of trading that need the most discipline, or that are the most difficult to follow? Different for everyone.

    [Reply]


  15. Christian Franzoni
    12 months ago

    Do you mind if I quote a few of your articles as long as I provide credit and sources back to your blog? My blog is in the exact same niche as yours and my users would definitely benefit from some of the information you present here. Please let me know if this okay with you. Appreciate it!

    [Reply]

    Markus Heitkoetter Reply:



    Not at all. Go for it!

    [Reply]

 
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