Let's talk about what I would do differently if I had to start over in my trading career.
As you know, I've been trading for a long time. My first trade was actually in 1989 while I was still in high school. I really got serious when I got burned out working for IBM.
Eventually, I couldn't do the 'corporate life' anymore. I decided to become a trader in 2002 and remember making a lot of mistakes
3 things that I would do differently if I had to start over.
Number 1: I would make sure that I have at least $10,000 that I can put in my trading account.
I remember my very, very first trading account of $5,500 that I blew out in no time.
I remember I really wanted to put $6,000 in, but I put $5,500 and the money was gone in pretty much no time.
First thing as a trader, you have to have enough money to trade. And I believe the magic number is $10,000 to get started with.
You don't need much more because honestly, if you can make money on a $10,000 account why do you think you'll make money on $100,000 account? So $10,000 to get started.
Number 2: I would make sure that I keep it simple.
In the beginning of my trading career I made it so complicated. I was thinking that if I plugged enough indicators on the chart that then I'd have the 'Holy Grail', right?
There were so many indicators on my chart that I couldn't see the prices anymore!
I was following all kinds of different systems, hopping from one system to another... following price analysis, price action, indicators... rI was all over the place.
So, if I had to start over, I would keep it simple and focus on the 3 basics which is what to trade, when to enter and then when to exit.
If I had to start over what would I trade?
When I started trading many, many years ago, I started trading futures and I think this was a big mistake. I say this because futures have enormous leverage.
And if you don't know what you're doing it just means that you're losing money faster.
So, if I had to start over, I would definitely learn how to trade stocks and then use options instead of trading the stocks because this way, you have some more leverage.
In order to trade options, you need to know what a stock is doing whether the stock is more likely to go up, down, or sideways.
I would keep it simple and always focus on the 3 basics what to trade, when to enter, and when to exit. This leads me to the third thing that I would do differently…
Number 3: I would just trade what I see, not what I think.
See, in the beginning of my trading career, I traded what I thought is going on in the market, right?
I looked at the markets and I said, "I think this stock will go up. I think this futures markets will go up" and you know what? I was wrong most of the time.
The market didn't care about what I thought!
When I started trading, I wanted to make sure that I never missed the move. I was so concerned about not missing a move that I didn't really follow a system.
I saw a stock moving and I’d say "let's buy this." Stupid mistake. These days, I let the markets come to me.
Now I have a system that I follow, and I trade what I what I see and not what I think. Because whenever I thought a market would go up, it went the other way.
At some point, whenever I thought the market would go up, I would actually go short and bet on a falling market - that didn't work either.
So what would I do differently? Trade what do you see, not what do you think. I’d make sure that I have a system like I have right now based on indicators, not on fundamentals or on market data.
I like to look at indicators and when the indicators tell me it's time to buy, I jump right in and when the indicators tell me it's time to sell, I get out.
I hope you find this article helpful and that it helps you in your trading career.
Right now, I’m getting ready to give a boot camp.
During the boot camp, this is exactly what I talk about…
The 3 most important things when it comes to trading.
- What you trade, and what stock or option to trade
- When to enter
- When to exit. And when exiting, there’s two tings. You’re either right and you need to know when to exit with a profit, or you’re wrong and need to know when to exit with a loss.
You’ve always got to limit your losses.
If you're interested in attending one of our boot camps, please go to bootcamp.rockwelltrading.com
There’s a bunch of cities and dates and hopefully there's one close to you and we can meet in person. Although I'm not doing every single boot camp, I'm doing most of them. And it would be great to see you!