BrandonTrades
The speaker discusses how he wasted years flipping through different trading strategies, but found success when he stuck to one that made sense to him. He also advises against watching too many stocks at once and recommends focusing on high probability moves in Spy and QQQ. He shares tips on using psychological support and resistance levels and Fibonacci retracements to find good trades.
How to Improve Your Trading: Key Lessons Learned
Introduction
Trading is an art that requires practice, discipline, and patience. In today’s video, we will discuss the key points that have helped me significantly in my trading career and how they can help you as well. Whether you are a beginner or an experienced trader, these lessons are essential to your success.
Lesson 1: Stick to a Strategy That Makes Sense
As a beginner trader, it can be tempting to try different strategies to see which one works best. However, this approach can do more harm than good. It is crucial to find a strategy that makes sense to you and stick with it. Don’t be the trader who flips from one strategy to another every time one stops working. It’s not a sustainable approach.
To find a strategy that works for you, use different resources such as books, videos, or mentors. Once you find a strategy that makes sense, don’t be afraid to customize it to fit your needs. For example, if you are comfortable using fibonacci retracements, build a system around that. Remember, trading is personal, and ultimately, you need to develop your own style.
Lesson 2: Don’t Watch Too Many Stocks
Watching too many stocks can be overwhelming, and you may end up missing out on high-quality trades. As a beginner trader, it’s essential to focus on one or two high probability moves and catch them. Instead of watching six to seven stocks a day, narrow it down to three to four and eventually to one or two.
In my experience, trading spy and QQQ has increased my consistency. I mainly trade these names and use their futures (es and NQ) to help me make trading decisions. Psychological numbers such as 410, 415, 420, and 425 tend to be strong areas of support and resistance. Learning to read spy and QQQ can give you an overall gauge of the market and help you find high-quality setups.
Lesson 3: Develop a Trading Plan
Trading without a plan is like walking in the dark without a flashlight. You’re likely to stumble and fall. A trading plan is essential to keep emotions in check and maintain consistency. It should include your entry and exit rules, risk management, and position sizing.
Additionally, you need to track your trades, review them regularly, and adjust your plan as needed. Keeping a trading journal is a great way to track your progress and assess your strengths and weaknesses.
Lesson 4: Manage Your Risk
Trading is risky, and there’s no guarantee of profit. Therefore, managing risk is crucial to your success. Before entering a trade, you should determine your risk-reward ratio and ensure that it meets your criteria. It’s also important to set stop-loss orders to protect your capital.
In general, risking no more than 1-2% of your trading account per trade is a recommended practice. This way, you can survive losing streaks and avoid blowing up your account.
Lesson 5: Be Patient and Disciplined
Trading is not a get-rich-quick scheme. It requires patience, discipline, and persistence. You won’t become a profitable trader overnight, but with consistency and dedication, you can achieve success.
To be patient, you need to wait for high-probability setups and avoid chasing trades. Don’t let FOMO (fear of missing out) cloud your judgment. Remember, there will always be another opportunity.
Discipline is critical to following your trading plan and sticking to your strategy. It’s easy to deviate from your plan when emotions take over, but discipline can help you stay focused and avoid impulsive decisions.
Lesson 6: Continuously Educate Yourself
Trading is an ever-evolving field, and it’s essential to stay informed and educated. Attend webinars, read books, and follow successful traders online. Don’t be afraid to ask questions and seek help when needed.
Additionally, you need to keep up with the news and current events that affect the markets. Knowing how to interpret economic data and news releases can help you make better trading decisions.
Conclusion
Trading is a challenging but rewarding endeavor. By applying these key lessons, you can improve your trading and achieve success. Remember to stick to a strategy that makes sense, watch fewer stocks, develop a trading plan, manage your risk, be patient and disciplined, and continuously educate yourself. The path to profitability may not be easy, but with hard work and determination, you can make it a reality.
