Learn to be process focused and money will come.
If you want to make money trading this year your starting point should be good process flow. A process flow built around a market structure will make you independent and confident trader. Once you have process in place you will find trades and will be able to enter and exit them efficiently. Process flow also reduces psychological issues.
Start with process flow if want to improve your trading this year. However imperfect it is start first by setting up a process flow for trading any setup you like. As you go along in few months that process flow will improve.
If you are new to trading or struggling trader your focus should be on perfecting a process flow. Which often can be a big challenge in the early years as you still are not sure about your setup itself and are flirting from setup to setup and are easily influenced by others.
Let us say you want to swing trade momentum stocks having breakout, then you need a well thought out process to find and trade them. The process would involve kind of scans to use, criteria for selecting particular trade, where and when to enter, where and when to exit, how to manage the trade if things go wrong, how much to risk , how to track the trade and so on.
Let us say you want to swing trade momentum stocks having breakout, then you need a well thought out process to find and trade them. The process would involve kind of scans to use, criteria for selecting particular trade, where and when to enter, where and when to exit, how to manage the trade if things go wrong, how much to risk , how to track the trade and so on.
Process flow development involves the mundane task of actually making a setup or idea work. Very few trading books or sites focus on it. Many claim they have "proprietary" method to find the trade which they can not disclose. Which is just marketing gimmick. What a beginner trader needs most is detailed process flow.
If you like to trade anticipation develop a setup process flow for that. I have detailed my anticipation process flow here and if you think it might help you , then you can use that as starting point to build your own process flow. Similarly if you would like to trade earnings breakout you can find several posts detailing process to find them. If you like trading news then set up process flow for that. Day traders thrive on trading news and the really good day traders have perfected the process to quickly process news.
If you like CANSLIM kind of growth investing then setup process flow to find and buy good growth stocks at right buy points and sell them. William O'Neil has written several books detailing every single steps in the process. If you want to learn that go in to depth of that and not just skim it. You can develop your own process flow to trade the growth stocks after understanding the process of others. It is a very powerful setup ida which can help you make millions once you develop skills and process
If you like beaten down stock setup process flow to identify and buy them. Value investors and turnaround investors do this. This kind of setup is again a proven setup and is favorite of mutual funds and institutions.
When you focus on others picks without focusing on process flow , you are setting yourself up for failure. A process flow once perfected is lifelong and you will not needed others to find profitable ideas. If you like to trade others picks setup a process flow to find and trade them. For example you want to trade picks from activist investors then setup a process to find and trade them.
Unless you have a process no miracle can make you good trader or investor, unfortunately there is no shortcut to this process and some traders waste years realising this.. Once you have process you can start to improve it. Once you have process you can do things in less time. However imperfect your process , it is the first starting point to becoming profitable trader. In the beginning run only one or two processes. Your brain will not be able to handle many processes simultaneously. So be less ambitious . Do simple setups that are used by most swing traders first. It will help you gain confidence.
I get lot of emails daily from readers of this blog. One glance at the email and I can figure out what is likely to happen to the trader. Those who start by asking how much money then can make weekly or monthly are putting the horse backward. Stop dreaming about the money you will make trading. Unless you have a process nothing happens. Once you have process you start finding trades. Once you have a process you follow it to enter those stock. Once you have process you know when to exit them or put stop.As you trade more a process you will find simpler ways to do same thing. Once you have one good process for swing trading going well then you can add more processes.
When developing processes think simple. A very simple process with few steps is easy to follow. A 17 step process which requires 500 page manual is doomed. Simpler a process and less the steps involved in it easier it is to perform. If your process involves 10 steps something is wrong with it. Complex process lead to cognitive load.
Learn to be process focused and money will come. You can not outsource trading unless you are very rich. If you want to make money trading you have to learn to do it yourself. This is true of investing also. Good traders do this for themselves and that talent is not easily available for others to just hire. It is the nature of this industry.
Become process oriented today if you want to make serious money trading .....
If you like to trade anticipation develop a setup process flow for that. I have detailed my anticipation process flow here and if you think it might help you , then you can use that as starting point to build your own process flow. Similarly if you would like to trade earnings breakout you can find several posts detailing process to find them. If you like trading news then set up process flow for that. Day traders thrive on trading news and the really good day traders have perfected the process to quickly process news.
If you like CANSLIM kind of growth investing then setup process flow to find and buy good growth stocks at right buy points and sell them. William O'Neil has written several books detailing every single steps in the process. If you want to learn that go in to depth of that and not just skim it. You can develop your own process flow to trade the growth stocks after understanding the process of others. It is a very powerful setup ida which can help you make millions once you develop skills and process
If you like beaten down stock setup process flow to identify and buy them. Value investors and turnaround investors do this. This kind of setup is again a proven setup and is favorite of mutual funds and institutions.
When you focus on others picks without focusing on process flow , you are setting yourself up for failure. A process flow once perfected is lifelong and you will not needed others to find profitable ideas. If you like to trade others picks setup a process flow to find and trade them. For example you want to trade picks from activist investors then setup a process to find and trade them.
Unless you have a process no miracle can make you good trader or investor, unfortunately there is no shortcut to this process and some traders waste years realising this.. Once you have process you can start to improve it. Once you have process you can do things in less time. However imperfect your process , it is the first starting point to becoming profitable trader. In the beginning run only one or two processes. Your brain will not be able to handle many processes simultaneously. So be less ambitious . Do simple setups that are used by most swing traders first. It will help you gain confidence.
I get lot of emails daily from readers of this blog. One glance at the email and I can figure out what is likely to happen to the trader. Those who start by asking how much money then can make weekly or monthly are putting the horse backward. Stop dreaming about the money you will make trading. Unless you have a process nothing happens. Once you have process you start finding trades. Once you have a process you follow it to enter those stock. Once you have process you know when to exit them or put stop.As you trade more a process you will find simpler ways to do same thing. Once you have one good process for swing trading going well then you can add more processes.
When developing processes think simple. A very simple process with few steps is easy to follow. A 17 step process which requires 500 page manual is doomed. Simpler a process and less the steps involved in it easier it is to perform. If your process involves 10 steps something is wrong with it. Complex process lead to cognitive load.
Learn to be process focused and money will come. You can not outsource trading unless you are very rich. If you want to make money trading you have to learn to do it yourself. This is true of investing also. Good traders do this for themselves and that talent is not easily available for others to just hire. It is the nature of this industry.
Become process oriented today if you want to make serious money trading .....
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1 comment:
Excellent, and crucial, again:
'....Process flow development involves the mundane task of actually making a setup or idea work.
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