As a successful independent trader running a private trading group for over 15 years, I have worked with and trained many traders, some very successful and many who never quite make it. Over the years, I have learned the 5 key steps you should take if you are interested in becoming a successful trader.
5 Steps to Becoming a Successful Trader
- Get Around Like-Minded People
- Develop a Deeper Understanding Of Trading
- Learn to Practice Trading Effectively
- Use a Trading Coach: Get the Most Out of Your Training
- Develop Your Own Trading Plan: A Trader’s Mindset
One thing is for sure, and that is if you aspire to become a trader, you should make the decision and commit to completing the learning process, proving to yourself that you can do it before you put any real money behind your trading endeavor.
Trading is a business, and though you can achieve well beyond your dreams, it is not a get rich quick process. If you don’t take it seriously you might be left more confused than when you started. Either get 100% into trading or get 100% out of it.
That said, here are our 5 steps to becoming a successful trader and how to accomplish them quickly and effectively.
Step 1: Get around like-minded people.
Learning something new takes time, a lot of time, especially learning something from the ground up. Once you have completed the process, you not only understand all the mistakes you’ve made along the way, but you probably have a long list of shortcuts and tips that could have saved you a ton of time.
If you are just starting the process it feels like there is so much you don’t know and can become overwhelmed by the vast amount of information out there. This will lead you to jump around everywhere and end up with a lot of wasted time.
Getting around like-minded people is the best way to focus on the 20% of information that will get you through the process the fastest, and supply you with the shortcuts and tips from day one.
You can find traders everywhere, from trading forums to social media to trading rooms supplied by your broker. However, the problem with these spaces is that they are scattered at best, and at worst they do more harm than good. For instance, they are trading a wide variety of strategies sharing both good and bad information.
As a result, you are still on your own with your emotions pulling at you to do the wrong thing at precisely the wrong time.
Crush Pro Teams
Our trading teams are focused on implementing strategies that work to share opportunities, trade, and complete the process of conquering the psychological hurdles to develop a trader’s mindset through feedback in our trading review sessions.
Each team has pro traders as well as traders at varying points along the path to master trader to help you learn from OPE (other people’s experience) and get through the learning curve as quickly and efficiently as possible.
While you are working hard to develop your trading skills, it is important to stay motivated. There are achievable milestones throughout the process, and we award you every step of the way from start to finish through our Crush Rewards Program.
Step 2: Develop a deeper understanding of trading.
To develop a deeper understanding of trading you have to go beyond just remembering factual information, and make what you learn your own by applying it in your trading. You must take an active role in the process and learn by doing. Immersion is by far the best way to learn anything.
Research shows that people retain:
- 5% of what they learn when they’ve learned from a lecture.
- 10% of what they learn when they’ve learned from reading
- 20% of what they learn from something audio-visual.
- 30% of what they learn when they see a demonstration
- 50% of what they learn when engaged in a group discussion.
- 75% of what they learn when they practice what they learned.
- 90% of what they learn when they use it immediately.
Learning to trade is like learning to ride a bicycle. Even though there are a wide variety of trading concepts, you will learn them a lot faster by opening the charts and practice, gaining valuable experience through making mistakes.
“Perfection is not attainable. But if we chase perfection, we can catch excellence.”Vince Lombardi, Head Coach Green Bay Packers (1959-67)
The article “How to Gain a Deep Understanding” by Rob Marchant at Antidotes for Chimps discusses this concept well.
“Deep Understanding takes engagement, hard work, and commitment. Being actively engaged in something is one of the few ways to promote higher learning, and this can only happen if you are genuinely interested in the topic, or are being pushed forward by a strong external motivation.”
At Crush Pro Trading, we use a blended learning approach to teaching and training, using a combination of the approaches mentioned above. This is accomplished through our online training site and gives you control over time, place, path, and/or pace.
We also hold live online workshops in small groups to make sure that you can apply the theory learned, as well as in-person training if you happen to be in Tokyo and no virus is running rampant. Finally, we guide you through the path to master trader, complete with all the activities to get you there as quickly as possible.
If you are ready to get started we recommend reading “The New Market Wizards”, by Jack Schwager. He interviews some of the world’s top traders and it will give you a good idea of what is possible as well as what is required to achieve it.
Step 3: Learn to practice trading effectively.
Paper trading or practice trading is the repetition of implementing your trading strategy without the risk of losing real money. It takes practice to master the trading skills you have been learning.
Here are some different ways to practice trading:
• Trading simulator: A trading simulator is a program that allows you to make actual trades using historical data. The market is moving as if it is live. You can make many trades in a short period of time. All the trades are recorded for easy exporting into your trading journal.
A couple of simulators that work really well and are reasonably priced are Forex Tester for the FX markets, and Track N Trade for the futures markets. We are using both of them in the Crush Pro Trading School and we highly recommend them. You can click on both names to check them out, and they already come with our special discount!
• Record by hand: It’s free and all you do is find every instance where your strategy would have traded and record the results in your trading journal. However, it takes longer to do and doesn’t give you a chance to practice trade management.
• Demo Trading: Open a demo trading account with your broker which gives you an account with fake money so you can trade your strategy in the live markets. This takes the longest as you have to wait for your trading setups.
Mastering the skill to trade takes practice, a lot of practice. Immerse yourself in the learning process and focus. We know that multitasking is bad, so isolate yourself and turn everything off including your smartphone and focus on trading. Well, after you watch this great video!
How to Practice Effectively… for just about anything – Annie Bosler & Don Greene of Ted-Ed
“Effective practice is consistent, intensely focused, and targets content or weaknesses that lie at the edge of one’s current abilities.”
Start off practice trading slowly, being conscious of every thought and decision you make. Write everything down as it will help you remember and easily review your trades. By repeating these actions you will be able to perform them with more ease, speed, and confidence with the goal of improvement.
Of course, this will take time, so focus your efforts in short bursts of around 30 minutes. Don’t try and do marathon sessions as you will lose focus and just be going through the motions. By increasing the speed of your trades gradually, you have a better chance of doing them correctly. Top performers continue to consistently practice their craft. Trade mastery doesn’t just come from putting in 10,000 hours of practice. Evidence shows that it’s also the quality and effectiveness of that practice. So be in the moment and put in those repetitions.
Step 4: Use a Trading Coach: Get the most out of your training.
What is a trading coach?
A trading coach is an experienced trader who can teach you the skills to trade the financial markets, help you to develop a trader’s mindset, and reach your goals as effectively as possible. Ultimately, this will grow your trading account.
From business titans to professional athletes, successful people performing at the highest levels all have one thing in common; they have a coach. When it comes to learning something new, having a coach will not only facilitate your trading development faster but also help you see the blind spots that you couldn’t see before.
According to best-selling author Seth Godin, there are five reasons you might quit in anything you do:
- You run out of time
- You run out of money
- You get scared
- You’re not serious about it
- You lose interest
“Leaders are made, they are not born. They are made by hard effort, which is the price which all of us must pay to achieve any goal that is worthwhile.”— Vince Lombardi, Head Coach Green Bay Packers (1959-67)
All Crush Pro Team Leaders “coach by example”. They have developed the strategy their team is trading, and they are all profitable independent traders that work closely with all members of the Crush Pro Team.
They understand the plan inside and out, trade management, and they have conquered the psychological hurdles. Most of all, they understand how to give support and guidance to help you learn and progress in a constantly changing environment trading the markets.
As Sir John Whitmore, a leading figure in the field defined it, skilled coaching involves “unlocking people’s potential to maximize their own performance.”
Core Benefits of Coaching
• Highlight your strengths and weaknesses – A trading coach can help you see your strengths and weaknesses so you can focus on improving key areas that will get you in the right mindset and on track to reach your goals and avoid the “Dip”.
• Hold you accountable – You know what steps need to be taken along your path to a master trader, and a little accountability might just be the push that will get you there. They will be there to remind you why you started in the first place, and how important it is that you achieve your goals.
• Help you reach your trading goals – Whatever your reason is for learning to trade, whether it is to become financially free, add a second income, or you lost your job and are looking to change your career, it’s great to have someone cheering you along and helping you get there. Your trading coach is on your team.
“11 Ways to Get the Most Out of Working With a Coach” by Stephen Key (read here)
If you follow these steps, you’ll get the most out of working with a coach. It is our mission to guide you through the process of learning, practicing, and ultimately completing your path to a master trader, becoming a profitable independent trader working together with your team of traders.
Step 5: Develop Your Own Trading Plan – A Trader’s Mindset
Developing your trading plan is important. As trading is a psychological endeavor, this means that you need to design and implement an approach that fits your personality. There is a wide variety of approaches to analyzing markets and profit from trading them. The mentality that allows you to be successful in society is often a psychological barrier in trading. A trader’s mindset is a skill that can be learned and will allow you to trade any plan consistently.
“Almost every person I interviewed felt that money management was even more important than the trading method used.”– Jack Schwager, The Market Wizards Series
What is a Trading Plan?
A trading plan is a set of rules to follow when trading that gives you an “edge”. An edge is what puts the probability of winning in your favor. As Mark Douglas puts it “Winning a trade is easy, but in order to win consistently you must develop a trader’s mindset.”
A trading plan can be broken down into 5 essential elements:
- The Setup: Identify and analyze opportunities
- Entry: How to get into the market
- Exits: How to get out of the market when you’re right or wrong
- Risk Management: Is the opportunity worth the risk?
- Money Management: How to grow your capital
Emotions are a hindrance and the voices in your head will be attacking you until you learn to control them. Stay focused on the process of trading instead of the outcome. The typical trader is obsessed with the outcome of trades while the professional trader is focused on the process of trading and lets the outcomes take care of themselves. Love the process of trading!
How to Develop a Trading Strategy
After determining what type of trader you are, you can either find a strategy that is already working and adjust it to fit your personality and risk tolerance, or you could build one from scratch. At Crush Pro Trading we offer both options. Focusing on the psychology of trading, we are working together in teams, implementing strategies that have a positive expectancy.
Traders can focus on learning the strategy, practicing it, and then trading it with real money, paying close attention to the psychology of trading. Once they have mastered it, they can move into developing a new strategy through the Crush Pro Trading School. This takes a much longer time, and many more hours of testing and practice to get it to where it can be traded with real money. Once accomplished, the trader can then run their own Crush Pro Team.
The Trading Cycle of Doom
The trading cycle of doom is one of the biggest pitfalls traders (especially newbies) fall into as they hop from strategy to strategy looking for the “holy grail”.
One reason is that there is an infinite number of solutions for putting together a trading plan with a variety of styles of trading. Another reason is that we as humans like new things, especially new things that are popular, trendy, or have given someone success.
The trader finds a strategy and starts trading it. Often they will see a little success in the beginning, but then the losses start adding up, a mistake is made here and there, and before you know it the trader starts changing the strategy, making tweaks to each part, adding filters, and then instead of becoming profitable, the losses grow at increasing size and frequency.
Instead of trying to figure out the root problem, the trader is off searching for a new strategy completely unaware that the problem might not be with the strategy but is with the person implementing it.
If there were a holy grail in trading, it would be to have the disciplines to follow the rules of a strategy, don’t over-optimize it, and conquer the psychological hurdles by developing a trader’s mindset. This is exactly what you will achieve by completing the 5 steps to becoming a successful trader.
Avoid the “Dip”
The “Dip”, a term coined by Seth Godin in his eBook “Pushing Past the Dip: How to Become the Best in the World” (click here to download free) is another pitfall traders fall into. When people decide to learn something they are motivated to get started, and once they do start they become more motivated.
The dip occurs when you reach the point of dissatisfaction or disinterest with your learning. You might no longer see the novelty in learning to trade or you might be feeling burned out; in any case, you’ll lose momentum, stop studying, and fail to master your trading skills.
By following these 5 steps to becoming a successful trader, we can help you avoid the dip by making your study habits continually rewarding through the activities, and guide you through each milestone along the way to master trader.
To become a successful trader it takes a lot of hard work, and it takes experience. It will not happen overnight. Many traders think that they can put together a great trading plan and by strictly following the rules they will be profitable right away. Unfortunately, this isn’t how it works.
By completing these 5 steps to becoming a trader you will learn the techniques, you will develop your plan, you will put in the work, and you will ultimately become an experienced trader, and once you have done all of that you will be successful.
Step 1: Get around like-minded people and you will be able to focus on what is important. You will not only learn from your mistakes, but you will learn from all the traders around you.
Step 2: Develop a deeper understanding of trading. By now you understand that just by reading a book or watching some videos, taking notes, and putting together a trading plan will not result in instant profitability. You are ready to be committed and actively engaged in the process of gaining valuable experience to go deeper.
Step 3: Learn to practice trading effectively. You know what needs to be done. Not just the amount of practice required, but the amount of quality and effective practice, as well as all of the live trading you must do to gain real success.
Step 4: Use a trading coach to get the most out of your training. Just because you see other traders having success, you shouldn’t expect that you can take the same plan and get the same results. You have to learn to think and act like a professional trader and a coach is there to guide you through the process.
Step 5: Develop your own trading plan. You must take the plan and make it your own by putting in the time to practice and become familiar with what type of trader you are. Developing a trader’s mindset takes time and effort, and a will that your goal is to be the best in the world. You will not settle for mediocre.
The plan is not what makes success. It is just a tool to help you gain the necessary experience to ultimately become successful.
“You can have the greatest tools, the greatest tactics, the greatest techniques, and you can have the greatest instruction on planet earth. But at the end of the day, you have to take those tools and you have to create your own experience with those teachings, with that training, and you’ve got to utilize them to build your own experience. When that experience reaches a certain point, only then will it start to produce for you.”— Oliver Velez, Professional Trader & My Mentor
We are real traders, making real trades with real growth, and we will help you achieve your goal of becoming a successful independent trader. With hard work and a little accountability, you can do it, just like learning to ride a bicycle.