What you learned from the previous part:
Trading is a complex and challenging activity that involves both understanding the market and having practical experience.
By using a demo account or paper trading, traders can practice their skills without risking real money.
Through paper trading, traders can try out different strategies, learn about market dynamics, and find the best trading style for themselves.
It is important to have discipline, perseverance, and self-awareness to succeed in trading.
I will start today’s letter to you with homework for the coming weeks.
If you really want to start trading now is the time. February is a great month to start.
Your homework:
Research trading strategies and test them!
Tips to find your strategies:
Think about your trading style:
Are you busy and can't look at the charts every day?
You might want to look at swing trading strategies.Do you have time during the day to trade during official sessions (e.g New York)?
Day trading strategies might be something to look at.
Do you like high-frequency trading in low time frames and short holding times?
Maybe scalping is something for you
Join a trader community1
You should look for communities that help you to find your path
Don’t buy a “alpha caller” or “signal” service to follow
I personally would not buy a course in the beginning. There are plenty of resources on the internet where you can find what you are looking for.2
You should really take your time once you found a system you like and backtest it for the next weeks.
I took 6 months to internalize a strategy with back testing, chart reading, and paper trading before I started to trade with real money.
Todays Lesson:
Recognize and develop your trading strengths
“It’s is important to know not only what you want - you also need to know what you can do”
tldr:
It's important to know your personal strengths and weaknesses in trading.
Weaknesses can be a normal part of human nature, but focusing on them can trap a trader in mediocrity.
Traders should focus on developing their strengths, such as quick thinking, analytical skills, adaptability, and inner peace.
Focusing on strengths can lead to outstanding achievements and self-confidence.
Traders can work on keeping their weaknesses at bay through processes and rule-based trading.
We naturally spend more time and energy focusing on eliminating weaknesses.
This effort generally does not pay off. Weaknesses rarely turn into strengths.
You’ll probably only manage to become average in the area you try to eliminate.
E.g if you never were really into sports you’ll never become an exceptional athlete, even if you train hard.
Accepting Weakness
If you ever want to advance your personal development you need to face your weaknesses.
Every new path you take is a challenge because you need to recognize and accept your personal deficits, without damage to your self-esteem.
Your ego might be powerful in hiding your weak spots, but they don’t disappear if you block them out. They really steal your chance to learn what brings you to stagnation.
Suppose that weakness is a lack of self-discipline to keep to loss limits.
You experience major losses, but you consequently block that weak behavior out. You don’t want to accept this as a sign of a lack of discipline, and this inability to face facts ruins your performance.
My friend, are you really honest with yourself?
Do you know your trading weaknesses?
Can you honestly admit your deficits, or do you play the victim and always blame the markets when things go badly?
If you really take your preparation time, paper trading will force you to recognize your weak spots.
If self-discipline is your weakness you can take action to counter this.
For example, you can practice the rule-compliant implementation of your trading plans on a demo account until you have internalized the processes/criterials to keep you focused and on track.
A weakness is a learning task with three steps:
Look for weak points in yourself before looking elsewhere
Recognize and accept that weaknesses are a normal part of you
Take necessary steps to keep your weaknesses at bay
Developing your strengths
I think you will agree that most people believe it’s more important to concentrate on their weaknesses than on their strengths to improve themself.
This is the result of your educational system. This focus on eliminating defects and correcting deficits starts in school. This system wastes your energy and traps you in mediocrity when it comes to trading.
Personal weaknesses are no excuse for wallowing in self-doubt. It’s much more effective to identify and develop strengths. This leads to outstanding achievements.
The success factor in trading lies in knowing your own, natural strengths. What skills and talent do you bring to the table?
Here are some examples of natural strengths:
You’re a quick thinker
You have analytical skills
You stay flexible and adaptable
You maintain inner peace and a clear view of your current situation
The likelihood that you’ll be a successful trader is much greater if you develop your own strengths than focus on eliminating your weaknesses.
It’s possible to get a grip on your weak spots with processes and rule-based trading.
Keep a growth mentality to create successful experiences that make it easier for you to accept your deficits. Success motivates and creates self-confidence.
In my next newsletter, I will cover:
Develop your skills and change competence
One community that helped me grow as a trader is
AlphaTradersCountryClub (Web3 Community)
@AlphatradersNFT
https://discord.gg/YU23AvXGSF
I personally recommend the free 2022 mentorship of the trader “The Inner Circle Trader” on youtube to start with.
Good read. Looking forward to your next post
Always enjoy reading these, and I loved the imagery you chose (or created) from Midjourney. Looking forward to listening to you on the 1% Club Twitter Space with Alex, my friend!