What do you wish you had been told?

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MarketMoverTrader

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Before you started trading, what do you wish you had been told? - one thing

Or, if you met someone thinking about starting to trade, what is the one piece of wisdom you would share with them?

I'm talking about trading in general, so not market-specific advice.
Try give it some thought.

Mine is probably: Don't believe anything anyone tells you, or anything you tell yourself - everyone has an opinion, but hard data and results over time count.

I'm hoping that newbies can get some guidance from this thread, if it grows nicely.

Also, if you don't like someone's advice, please try not to turn this thread into one that slates others' posts. I've sadly seen that happen and it ruins the original intentions of threads, and clutters them up.

Thanks ahead of time for your contributions!
 
You have to find a strategy that suits your personality and not somebody elses. Some people suit longer term trading and others short term, some people like lots of indicators and some like none at all - Figure that out first and build a strategy around you. Obviously it needs to be profitable but if it doesn't suit you psychologically then you have no hope.

Just my humble opinion of course.
 
Keep a journal.

There are two key parts to a trading system; the strategy and the trader. Each must be a good performer to achieve trading success. And each must be continuously assessed to assure top performance. The journal is used for both of these tasks. The journal is all about quality assurance. Evaluating the strategy and the trader for any degradation in performance so that action can be taken before serious damage is done.
 
Save your money and demo until you get things right. If you save through the process and you manage to work it out you will be equipped with the skills and have a starting capital to put to work.
 
Hotch said:
Risk:reward ratio aren't a strategy.

Care to expand?
Click to expand...

The whole aspect of "risk 2%/trade, risk:reward of 1:2 and you'll be a trading millionaire in 6 months" is just really bad. I chased the risk:reward ratio once upon a time as i'd heard about it from various places and learnt the hard way.
 
It is a jungle out there. The more innocent you are i.e. lack of experience, the more likely you are to get fleeced. You can only judge your own experience and that will be zero, in the beginning. Therefore , put a toe in, not the whole leg. Conservation of capital is the main object of the game.
 
Here's one thing I wish I had been told before I started - the importance of coming up with a metric to differentiate trading systems. In the beginning, most people focus on raw profit as the driver for choosing how they trade, but after a while it becomes clear that the relative size of profit to drawdown is quite key.

This is why equity investors have had such a torrid time.. over the last 5 years the markets have done next to nothing, net, but in 2008 there was a 40 pct drawdown. Buy and hold is not an optimal strategy, on this basis.
 
I wish I had been told that success lies outside the self, and that humility, gratitude, the relinquishment of grievances, and generosity are at its core.

I am thankful for the person who introduced me to this path, the person who taught me how to use a trading platform and employ strict money-management, and the person who encouraged my persistence.
 
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