Lessons From A Trading Mentor - Trading In Your Time

The best time-frame to trade can be a tricky problem for the beginner. Is it short term, medium term or long term. It may also be puzzling even knowing what those words mean. A day trader would think of a trade that lasts more than one day as long term. However to an investor, a trade that lasts several days would be a very short term trade. The definition of what is short, medium and long term is set by the trader himself. It is common however, for traders to think of trades that last days as short term, weeks as medium term and months or years as long term. These definitions are not set in stone however, as each trader will define the way they trade and the way they define the trades for themselves.

Some trading time frames will suit you better than others. Some people won’t ever be successful at day trading. They don’t want to be concerned with the markets movements from hour to hour. For other types of personalities, waiting for trades to develop over weeks or months is like watching grass grow. Day traders are content and suited to trading small movements in the market. It is also vital that you match the trading time frame with your lifestyle and career. If you have a day job it is simply not possible to watch and pay full attention to the screen all day long.

When you’ve mastered trading in your preferred time frame, you may wish to consider diversifying. Diversifying across markets is well known but less well known and practiced is diversifying across time frames and systems. Discipline and organization are vital if you will attempt to trade across time frames. A strong belief in your systems and your trading abilities are required. It will happen that you will get conflicting signals from different systems. For example a short term system may point to a buying opportunity while the medium term system is indicating a sell in the same market. It is tempting to get confused and sell in both systems. It takes discipline to do the right thing and follow the signals as they are presented without regard to what the other systems are indicating. Trading in multiple time frames is much easier said than done.

Learn more about how a trading mentor can help you, go to www.tradingcoachdirectory.com

Trading Coach Advice - The Most Valuable Lesson Learnt

Why do you go to a coach in any area? A coach generally has experience and you are looking to learn from their experience. If you learn from a coach then you ought to be able to avoid the same mistakes they made and that lots of people make when first starting out. Although it could appear expensive, in the long run, it will actually save you time and money. There are many reasons why you should get a coach when you try something new. It applies especially to trading.

Coaching is especially useful for those starting out in trading as the stakes are high. Unlike when you learn a new sport or hobby, if you make a mistake or error in trading, it will cost you money, sometimes a lot of money. Trading with real money is risky and a mistake will cost you financially. A coach has already learnt the hard lessons of what works and what doesn’t and can guide you. Trading coaches have lots of experience in the markets and I recently was interested to learn from them, what were the biggest lessons that they have learnt on their trading journey.

The first lesson is that you need to be objective. You should not listen to other peoples opinions. Once you get into a trade, you should not tell others about your trades, as you are following your own trading system. Once you start to listen and be influenced by others you will lose confidence. Follow an objective methodology and stick to it until the results prove to yourself that you need to change it. If you’re following a tested system, then you need to trust the system and follow it through the inevitable wins and losses.

Avoid the temptation to purchase the latest trading systems. There will be endless offers of trading robots, e books and systems. It is extremely easy to be tempted to read the glossy marketing and advertising materials that are sent to you. If you get onto a mailing list you will receive a constant flow of new offers about the latest and greatest ways to make money from the markets. You need to limit yourself to one system that you trust. Learn to forget about even reading those emails and websites that promise untold riches.

Professional traders often say that trading is like a business. You must treat you trading as a business to be successful. Trading is actually closer to running a conventional business than investing. This may surprise you as most people think of trading and investing as the same thing. If you are trading, you are following a system consistently that has clearly defined rules and you are expecting that over the long term, after you balance out the winners and losers, you will have made a profit. You are not expecting every trade to be a winner. You know what to expect in terms of winning percentage as you have researched the system. You are expecting that your trading system has a slight edge and will make you money only over a large number of trades.

Another great lesson is that of following a trading plan. A plan is important as it will state when to trade, the amount to put on the line, when to increase the trade size and when to exit. A trading plan will tell you everything you need to know. Successful traders following their trading plan consistently and have strict risk management and money management rules.

For more information about a trading coach go to www.tradingcoachdirectory.com

Classic Trading Books - Where To Start

Reading is a great way to learn when you are new to a subject. Reading allows you to learn from the experience of others, find out what went right, what went wrong and how they learned from their mistakes. It allows you to save time and money that you may have spent yourself. Learning about trading is not different to learning about other topics that you may read about. You have to be careful though, you could spend years just reading and never actually trading. As there are so many books, it is important to know which ones to focus on. With that in mind, I asked a number of trading coaches for their suggestions on what books they recommend to read for trading just starting out.

The first point to consider is that trading books cover a very wide range of topics. You can find many books on topics including psychology, technical analysis, fundamental analysis, money management, risk management and many more. It can help to plan ahead and think about the books that would be most useful for the stage of learning you are at. There are also a number of ‘classic’ books that are a great read for beginners as well as more experienced traders as they contain fundamental lessons in trading.

Even though some books have been around for decades, they are still popular and are regarded as classics. They contain ideas that are still applicable for trading today as they cover the basics of how trading works. Take a look at some of these classic trading texts: Secrets for Profiting in Bull & Bear Markets, Stan Weinstein, McGraw-Hill, 1988, Trading in the Zone, Mark Douglas, New York Institute of Finance, 2000, Trade Your Way to Financial Freedom (Van Tharp, McGraw Hill 1999), Trading for a Living (Elder, John Wiley 1993). When you are done with them, check out : Trade Your Way to Financial Freedom by Dr Van Tharp, Market Wizards by Jack Schwager,  “The Disciplined Trader” by Mark Douglas and “Reminiscences of a Stock Operator” by Edwin Lefevre.

For more information about a trading coach go to www.tradingcoachdirectory.com

Trading Coach Advice - Fix Your Mistakes Easily

When you start a new activity you’re of course going to make some mistakes. Trading is no different. Inexperienced traders will make lots of mistakes as they learn about the game of trading. The best way to approach the task of learning to trade is to understand that it is natural to make mistakes and be ready to fix those as you recognise them in yourself.

I recently interviewed a number of trading coaches and mentors and asked them what are the common mistakes they see when coaching new traders. These professional traders also spend time coaching private clients, so they regularly see traders progress from novices to making money out of the markets. The coaches find that it is only those people that are willing to learn from their mistakes and improve their performance that get to the level of making regular money from the markets.

So what are the mistakes that you need to look out for and try to avoid as a new trader. The first mistake is that new traders do not have a trading plan, or if they do it have one it is not complete. A trading plan is your game plan and tells you what you should do in different situations. A trading plan will help you when you are under pressure and have to make a decision, as you have already thought about it and will have determined the best action in the situation.

Another mistake that people new to trading make is being impatient. When you begin trading you cannot wait to start and trade. Sometimes people become impatient and will force a trade that isn’t really there. The people that force trades will take a trade that almost meets the criteria instead of waiting for the ideal setup. One of the keys to trading is to recognise that you must wait for your setups, you cannot force trades that are not there.

Stops are also a common problem. Many people will set the stop too near the price that they bought. It is the fear that gets them. These people are worried about losing their money and to protect their money and prevent a loss, they will set a very tight stop. They have not yet learnt that you must allow a trade to develop and setting a very tight stop will just get you out of a trade before it has had a chance to develop.. A trading coach can be a great way to speed up your learning of how to trade.