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An Interview with a Trader's Coach
I found this interview interesting and learned some things so I thought I would share it here. The link to the article below and I have also quoted the question and answer that I found most interesting for new traders:
stocktickr blog » Blog Archive » Interview with Bennett McDowell, TradersCoach.com
Quote:
StockTickr: What advice can you offer traders who are just starting out?
Bennett: Most new traders believe trading is easy and the only thing you need to be successful at it is money. In other words, money is the ticket to gain entry to making more money. They fail to realize that successful trading is a skill that takes hard work, persistence, time, and education to master. Most traders view trading as a “Get Rich Quick” program.
I feel the most important rule before taking a trade is to calculate the correct Trade Size based on the trader’s account size, trade entry, trade exit, and percent risk which really should never exceed a total of 2%. Of course other important trade elements include reviewing higher and lower time frames, potential risk to reward, and basing your trades on the realities of the market.
I believe that no one was born a great trader and that anyone with the passion, commitment, the right education, and the risk capital has the potential to become a great trader. Trading is not a get rich quick philosophy, instead it is a profession that needs to be mastered in order to be profitable. Through education, practice, and commitment you can potentially master the skills needed to trade the financial markets for a living. Trading should be fun, and if it is not fun for you, then you are doing it wrong!
Every trader trades his or her own beliefs. And therefore, your beliefs and personality will determine how you trade and whether you will be successful or not.
If you must HOPE that your trade will make money, then you are not trading well and hoping creates anxiety, stress, fear, and greed. Paper trading is a great way to practice your trading and develop your skills in a stress free environment before risking real money. If you cannot profitably paper trade, then I believe you will not be profitable trading with real money in the markets. Once you begin to trade in the markets with real money, your psychology becomes the main factor in your being successful or not.
All trading methods involve risk and there are no absolutes in life, the markets, or in trading. In trading like life we live in a world of probabilities.
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