There is no general approach to trading. Most traders believe that there is a formula that can be used to predict market fluctuations. But in reality, not only is there no such formula, but it is not even possible to develop a general model of markets, since patterns are constantly changing. There are numerous styles and approaches (which sometimes contradict each other) used by traders, perfectly demonstrate the huge opportunities that stock trading provides. That is, there are a large number of ways to become a successful trader. But in order to find your way, you need to work hard.

Look for the style of trading that best suits your preferences. Each trader for successful trading must develop his own method that will correspond to his ideas about the market. A trading approach that is profitable for one trader can lead to losses for another trader if he does not adapt the method to his abilities and ideas. As O’Shea said: “If I try to teach you what I know myself, you will fail, because you are not me.” Failure can befall a trader even if he stands behind a successful trader and closely observes everything he does. Such training will allow you to adopt some good habits, but no more. Indeed, in the future there will be many moments when the second trader will want to do something completely different than the first trader. This does not mean that trading one may be less successful than trading the other, but they will certainly operate differently. A trader for successful trading needs to learn to be himself.

Trading should not make you feel uncomfortable. In the event that the open trading position is very large, traders often exit trades during minor corrections in which they could make a significant profit. This happens because of the fear that prevails over the mind. This means that the size of positions must be reduced until fear no longer prevails over reason. Even if the market is moving in the right direction, using only a fraction of your capital to trade may end up being more profitable than if you were to invest all of your capital.

A good trader must adapt quickly. If trading were so simple that a trader could find one pattern and exploit it for a living, then everyone would be successful. But life is much more complicated: markets change all the time, and a pattern that was profitable can suddenly stop working. This is what a good trader should always be ready for: even the most reliable approach can stop making a profit and start bringing continuous losses.

Don’t confuse winning/losing trades with good/bad trades. The thing is, there are good trades that make losses and bad trades that make profits. After all, the most wonderful and profitable trading strategy has a certain percentage of losing trades, but this does not make it bad. It is impossible to understand in advance whether a transaction will bring a loss or profit. But if trades are made in accordance with a trading system that has a positive mathematical expectation, then they will be good and correct, regardless of the amount of profit or loss. This is explained by the fact that trading with a positive mathematical expectation makes a profit over a long period of time. If transactions are made randomly, then regardless of the amount of profit or loss, they will be bad, because over a long period of time they are guaranteed to bring a loss to the trader.

Focus on methods that work and spend less time on methods that don’t work. This advice from Clark is very commonplace, but many traders do not follow it. Very often you can find cases when a trader manages to find a successful trading style, but he gets bored and begins to make extraneous transactions, not quite understanding what he is doing. As a result, the overall performance decreases. In order to make a profit, a trader must focus on what he is good at and concentrate on those trades.

On the way to success, you need to make a lot of mistakes. Dalio argues that all your mistakes need to be studied and carefully analyzed — only this will help to achieve progress and achieve success. After all, each discovered and worked out error will improve your trading approach or find weaknesses in it. The trader will only benefit if he writes down on paper each of his mistakes, draws a conclusion in writing and writes down what adjustments he made to trading after that. You should not rely in such a business as trading, only on memory. Periodic review of the records will allow you to consolidate the acquired skills and prevent these mistakes in the future. It is impossible to completely avoid mistakes in trading. But the success of a trader is determined It is not the absence of errors, but their low frequency.

Make only those trades that you are sure of. A trader needs to have a considerable amount of patience in order to wait for trades that he is sure of. This increases the number of profitable trades. For example, a good trader is not bothered by having to do nothing for long periods of time. He does not make trades until he sees that it is possible to make a trade that suits his trading strategy.

Don’t trade on a wave of euphoria. A good trader should not fall under the influence of euphoria or stock market hysteria. In general, excessive euphoria in the market is the first sign of an approaching trend reversal.

Watch how the markets react to the news. Market reactions to news may be more important than the content of the news. According to Piatt, during one of the transactions there was an endless stream of bad news. He expected that this position would close with a loss after every bad news, but the price, despite expectations, did not fall. As a result, Piatt decided that this (the fact that the market does not react to the news) confirms his trading idea, and increased the size of his position four times. This deal brought him one of the largest profits in the history of his work. Studying the markets, you immediately understand the huge scale of exchange trading. The main thing is that trading is equally accessible to everyone. One click — and you are on the stock exchange in New York, the second click — and you are already in Tokyo. These exciting journeys can bring not only pleasure, but also money.

There is no general approach to trading. Most traders believe that there is a formula that can be used to predict market fluctuations. But in reality, not only is there no such formula, but it is not even possible to develop a general model of markets, since patterns are constantly changing. There are numerous styles and approaches (which sometimes contradict each other) used by traders, perfectly demonstrate the huge opportunities that stock trading provides. That is, there are a large number of ways to become a successful trader. But in order to find your way, you need to work hard.

Look for the style of trading that best suits your preferences. Each trader for successful trading must develop his own method that will correspond to his ideas about the market. A trading approach that is profitable for one trader can lead to losses for another trader if he does not adapt the method to his abilities and ideas. As O’Shea said: “If I try to teach you what I know myself, you will fail, because you are not me.” Failure can befall a trader even if he stands behind a successful trader and closely observes everything he does. Such training will allow you to adopt some good habits, but no more. Indeed, in the future there will be many moments when the second trader will want to do something completely different than the first trader. This does not mean that trading one may be less successful than trading the other, but they will certainly operate differently. A trader for successful trading needs to learn to be himself.

Trading should not make you feel uncomfortable. In the event that the open trading position is very large, traders often exit trades during minor corrections in which they could make a significant profit. This happens because of the fear that prevails over the mind. This means that the size of positions must be reduced until fear no longer prevails over reason. Even if the market is moving in the right direction, using only a fraction of your capital to trade may end up being more profitable than if you were to invest all of your capital.

A good trader must adapt quickly. If trading were so simple that a trader could find one pattern and exploit it for a living, then everyone would be successful. But life is much more complicated: markets change all the time, and a pattern that was profitable can suddenly stop working. This is what a good trader should always be ready for: even the most reliable approach can stop making a profit and start bringing continuous losses.

Don’t confuse winning/losing trades with good/bad trades. The thing is, there are good trades that make losses and bad trades that make profits. After all, the most wonderful and profitable trading strategy has a certain percentage of losing trades, but this does not make it bad. It is impossible to understand in advance whether a transaction will bring a loss or profit. But if trades are made in accordance with a trading system that has a positive mathematical expectation, then they will be good and correct, regardless of the amount of profit or loss. This is explained by the fact that trading with a positive mathematical expectation makes a profit over a long period of time. If transactions are made randomly, then regardless of the amount of profit or loss, they will be bad, because over a long period of time they are guaranteed to bring a loss to the trader.

Focus on methods that work and spend less time on methods that don’t work. This advice from Clark is very commonplace, but many traders do not follow it. Very often you can find cases when a trader manages to find a successful trading style, but he gets bored and begins to make extraneous transactions, not quite understanding what he is doing. As a result, the overall performance decreases. In order to make a profit, a trader must focus on what he is good at and concentrate on those trades.

On the way to success, you need to make a lot of mistakes. Dalio argues that all your mistakes need to be studied and carefully analyzed — only this will help to achieve progress and achieve success. After all, each discovered and worked out error will improve your trading approach or find weaknesses in it. The trader will only benefit if he writes down on paper each of his mistakes, draws a conclusion in writing and writes down what adjustments he made to trading after that. You should not rely in such a business as trading, only on memory. Periodic review of the records will allow you to consolidate the acquired skills and prevent these mistakes in the future. It is impossible to completely avoid mistakes in trading. But the success of a trader is determined It is not the absence of errors, but their low frequency.

Make only those trades that you are sure of. A trader needs to have a considerable amount of patience in order to wait for trades that he is sure of. This increases the number of profitable trades. For example, a good trader is not bothered by having to do nothing for long periods of time. He does not make trades until he sees that it is possible to make a trade that suits his trading strategy.

Don’t trade on a wave of euphoria. A good trader should not fall under the influence of euphoria or stock market hysteria. In general, excessive euphoria in the market is the first sign of an approaching trend reversal.

Watch how the markets react to the news. Market reactions to news may be more important than the content of the news. According to Piatt, during one of the transactions there was an endless stream of bad news. He expected that this position would close with a loss after every bad news, but the price, despite expectations, did not fall. As a result, Piatt decided that this (the fact that the market does not react to the news) confirms his trading idea, and increased the size of his position four times. This deal brought him one of the largest profits in the history of his work. Studying the markets, you immediately understand the huge scale of exchange trading. The main thing is that trading is equally accessible to everyone. One click — and you are on the stock exchange in New York, the second click — and you are already in Tokyo. These exciting journeys can bring not only pleasure, but also money.