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| The M.R.S Trader – The Essentials of Successful Trading - Written by Kelvin Chan |
This article is published in the April's issue of the Trader's Journal
I’ve often wondered long and hard what it took to succeed when I first started out and had only a few clues as to how. I didn’t quite understand then what the professionals meant when they said a successful trader has to have a certain psychology, rules on risk management and also knows their how-what-when-why-where concepts on entering and exiting a trade.
And it so happened that after trading for about 2 years, I begin to realize and know these concepts on many more levels and not just on the intellectual one. It’s my desire to share these with both seasoned and new traders alike.
In what I term the M.R.S Trader, we will have an in-depth look at the mindset, risk management and also strategies that the trader has (in that sequence as well). They are the 3 pillars of success in trading.
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(M)indset
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Without a doubt, this is absolutely the most important element out of the 3 that we will cover (not belittling the other 2 in the process). Many processes in life require that we get our mindset/psychology on the right track and trading is not an exception.
As a start, we have to tackle the truth and you have to ask yourself this honest question …. “Why do I trade?”
It’s amazing really but many people who trade are not really in for the profits (although they think they are). There’s usually a myriad of reasons but one of the more common ones is that they’re trading for the excitement of it.
I remember some time ago I was chatting with a friend and the conversation went like this:
me: I'll stay out for now. don't rush into a trade
friend: i know it
friend: i prefer trading when the situation is rushed, it blows up my adrenaline
me: not good.
me: are you trading for profit or for excitement?
me: Casinos provide more entertainment
someone: hehehe …
My point is that if you are not trading primarily for monetary gains, then you shouldn’t be trading at all.
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