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Trading Advice to My Younger Self

younger trading selfA great quote by Martin Luther King Jr states:

‘Knowledge is a process of piling up facts; wisdom lies in their simplification’

I’m a big believer in simplification when it comes to trading. And I don’t mean being lazy and not constantly researching, learning, testing and refining processes.

In many ways trading is a hugely complex and noisy business. The markets are flooded with so much varying opinion and conflicting market analysis. To the extent that sometimes I wonder if anyone really knows what they are talking about. And if they do, are they able to apply their knowledge towards developing a successful trading strategy. One that is consistently able to extract profits from a beast that to many represents nothing more than chaos in motion.

When I first started off trading all those years ago, I was under the impression that the more I learned, the more success I would have. In reality though, this was only half the story.

So if I was able to go back in time and offer trading advice to my younger self, what would I say?

Paraphrasing Martin Luther King Jr, I would have told myself that knowledge is wonderful. Yet simplifying this knowledge into a clearly defined strategy suited to my personality type, would be the key to my trading success.

And while I was at it, I'd throw into the mix a few more ‘Truth Bombs’ to my younger self as well:

  1. Accept you have no idea which way the market is going to move from one day to the next
  2. Never trade without a strict risk management strategy
  3. Stop being an Adrenalin junky and drop the ego
  4. Stop over trading and chasing wins
  5. Understand the art of correct position sizing
  6. Stop focusing on win rate and money
  7. Become an expert in assessing risk reward for every trade
  8. Stop staring at screens. Become an EOD trader - don’t give up your day job
  9. Spend more time with friends and family – never let trading take over your life
  10. Stay healthy, eat well, sleep, exercise, and maintain a sense of gratitude for what you have.

Would my younger self have listened? Maybe I should have added in:

Drop the arrogance!

‘Truth Bombs’ are rarely easy to swallow. Especially when you are young and feeling indestructible. The markets do have their own special way of humbling you though!

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