Being a good trader is not about making xxx% this month or this year. It’s about developing a set of mental attitudes. When you have that, success (the durable kind) is already yours.
Here are 14 rules for being a trader:
1. You do not control the market. You may like that or hate it, but this is a truth you have to welcome. There is a huge amount of freedom that is derived from not fighting the market and accepting what it gives.
2. Whatever is going to happen will happen, whether you want it or not. Your job is never to react blindly. This game is all about strategic maneuvering.
3. You will learn lessons. You are enrolled in a full-time, informal school called The School Of Hard Knocks. Each day in this school you will have the opportunity to learn many lessons that will occasionally hurt real bad. You may like the lessons or think them irrelevant and stupid but how you perceive these lessons and what you make of them will either make or break you.
4. There are no mistakes, only lessons. Growth is a process of trial-and-error; it’s a process of experimentation. The failed experiments are as much a part of the process as the experiment that ultimately works.
5. A lesson is repeated until learned. A lesson will be presented to you in various forms until you have learned it. And there is no way around that.
6. Trading is hard. It doesn’t matter how long you’ve been trading; how much of an expert you are, at times trading will be strenuous — it’s in the job description.
7. There are no real master traders, per se, because the market never stops teaching. And it can be a stern teacher, and you have to make it a must to always accept its lessons with grace.
8. The “journey” is no better than the “goal”. When your “goal ” has become your “journey”, your expectations are, as a result, reduced. You can then begin to place and manage your trades more effectively. Because it’s not about one epic win anymore, it about placing a lot of trades and assessing your results over x amount of trades.
9. Nobody has a crystal ball. Speaking of epic trades, people who tell you that they actually know something are just fooling you, first, and themselves, second. Here’s how you make it in this field: You stay engaged, you remain humble, and you do whatever you can to stay in the game long-term, and eventually you’ll catch one epic trade (or a couple of them).
10. Strong emotions will cloud your judgment. Make sure you size your trades correctly.
11. Your equity curve is merely a mirror of you. You see months of consistent profitability followed by massive drawdowns? This is a reflection of your inconsistency. Your equity curve reflects to you your own image.
12. Whether you make it as a trader or not, it’s up to you. We live in an amazing era. You have all the tools and resources you need. What you do with them is up to you. The choice is yours.
13. The answer lies inside you. The answers to trading’s conundrum lie inside you. All you need to do is look. If you can find a way to be consistent in your behavior, money will eventually take care of itself.
14. You will forget all this. Try to reread it on a regular basis.