I am asked all the time by Traders: “What does it take to be successful at trading? Is there a particular strategy I should use? Do I need to have more money? Do I need to have a lot of experience?” And the answer to all of these is a big emphatic”no”! What it takes is to get away from a poverty mindset and switch to a wealth mindset. What does it take to become a champion is to have a champion mindset. It takes changing the way you think; not only the way you think about money versus investing but about life in general.
You see the problem is for some people they’re just not ready to be wealthy.
And I realize some of you may not like that and that’s okay. My job, my goal, my whole purpose here is not to placate you and make you feel good and tell you someday you will get this. My job is to let you know that you can do this if you are willing to make the changes necessary. But it will require changes; Changes in mindset, so let’s talk about the three largest wealth limiting factors that the average trader tends to deal with.
First is fear, false evidence appearing real. We all deal with this in all facets of our life not just in trading.
Just think of the first time you ask somebody out on a date or were asked out on a date, how did that make you feel? The fear that that person might say no or the fear that you would be embarrassed when you answered the question if you were being asked out. False evidence appearing real.We’re all human.We all deal with it.The question is how do we deal with it as Traders.
You go into the trade with an understanding of how much you are willing to risk. Think about this one for a moment. If you enter a trade with no idea where the exit is and you only wanted to put $500 at risk and you were down $2,000, that could be a problem. Emotionally it could cause you to do things in the fray that you don’t want to do.
Next you have to determine how long you’re willing to be in the trade.
If you analyze this one, what’s taking place here, you only want to be in a trade for 5 days, 2 weeks, a month, whatever it is; but for some reason when you want to be in it for 5 days and out by that, you let it go and let it go and let it go.What happens is the option tends to deteriorate in value, it drops because of Time Value going away and now the trader is stuck holding an option that they don’t want to sell because it’s lost so much in value. They tend to hold on hoping and praying that it will come back. We all deal with fear you need to learn to control it. It will always be present but you need to know it’s there and you need to know how to push it to the background and take control.
Next is greed a very close cousin to fear.
Why is it a close cousin, because they go hand-in-hand when fear is present so is greed. Let’s think about this for a moment. You have a stock that you enter into the trade and the stock goes from $50 to $55 and you should exit the trade. You know you should pull the profits off, you know that you should not be in this any longer but you decide to stay. Why did you decide to stay greed, pure unadulterated greed. The trader is afraid of missing the next one. They’re afraid that the stock will take off and they might miss out on the next big run. I’m going to let you in on a little secret, there will always be a next big run. There will never be the last one. You will always have an opportunity to take advantage of another big trade. Don’t swing the bat and try to hit a homerun every time you get up to the plate, instead swing the bat trying to get on base and every once in awhile you’ll hit a homerun.
The last factor is the system that you choose to trade.
Whether you choose to trade deep in-the-money covered calls or just buying calls or puts or something as simple as buying the stock, no matter which one you choose it needs to be a system. That system needs to identify four core criteria, identification, entry, management and exit. Without these four key elements you will not have a system that functionally works.
The trader might get lucky occasionally but for the most part it will not be a winning system.
The second piece of the system is whether you build it yourself or use a fully functional system that already works. One that is being taught by a professional that knows how to handle the market. Here at Wealth Builders HQ we focus very heavily on identifying a strategy that we can utilize for trading the market, turning into a functional system and teaching others how to do it.
With our WBHQ Trading U program, we go through every phase of trading to take you from the identification to the entry, to the management and ultimately the exit and with all of the caveats in between, understanding what to do when the position moves where it does.
Click on the link to learn more about
WBHQ Trading U.
As you move forward keep these three wealth factors in mind; fear, greed and a system are the keys you need to Master, do not let them Master you or you will never become a successful Trader.