40 Trading Enlightenments That Struck Me Over The Years

I have a small notebook in which, over the years, I wrote down every time I heard something about trading that just made a lot of sense to me, or that enlightened me, or when I myself had a lightbulb moment. Today I want to share some of these wisdoms with you, unfiltered and raw. They are from my fundus of nearly a decade of gambling and trading, but as always should be taken with a grain of salt – after all, we all see the world with a different perception, and thus, acquire different truths (and trading styles). 

1. If you target less than 5 pips regularly, commissions and spread will eat your account balance.
2. You absolutely have to find a vent to release pressure and adrenaline – sports, drinking, painting, anything that helps.
3. If you can manage to find a mentor in which you believe, you will make it much faster.
4. Your trading style has to fit your personality and your lifestyle, or cognitive dissonance will get the better of you.
5. Meditation sucks, doesn’t work for me.
6. Don’t trade more than 4 hours per day, but those 4 hours with all the focus you can bring to the table.
7. Overtrading is your death.
8. Once you are comfortable missing a move, you will be able to trade profitably.
9. Not trading the news does not make sense at all – during news there is real liquidity and a real interest to push prices in one way or another. Let the market show its hand, then get in.
10. Let it turn, let price create structure, THEN get in, with the structure as protection in your back.
11. Don’t system hop, but adapt the system of your choosing to your needs.
12. Don’t trade overleveraged.
13. Yes, it is possible to turn a small account into a huge account, but don’t expect it to happen overnight, and don’t expect to be able to do it before your fifth (or so) year of trading.
14. Some are faster, some are slower, some will never get it.
15. Risk per trade is a function of the volatility of your strategy and your psychological ability to deal with swings in your equity.
16. Know exactly why you are trading, and what you want to achieve – which career path will be yours?
17. Daytrading is not easier than swingtrading or vice versa. They both simply require different skillsets, different abilities (yes, some people are just too slow for daytrading) and different preparation routines.
18. Trust your gut. Absolutely love the trade? Get in. Don’t love it? Just stay out.
19. No pain, no gain. Demo trading is ok, but don’t do it for too long. Risk micro amounts of money, get used to losing money. Because you will lose for the rest of your life if you want to be a trader. It’s part of the game. You “just” need to win more than you lose.
20. Listening to music while trading can be a good thing – just know yourself. If I listen to aggressive music in the car, I will push the pedal to the metal. The same happens when trading.
21. Have a trading journal and review, review, review.
22. Work on your psychology, but don’t underestimate the power of knowledge. Fear stems from not knowing. Work hard, know more, be more confident. Most psychological issues will dissolve into thin air.
23. Yes, I said: don’t system hop. But for the first year or two, try out everything you can. Every market, every strategy, every trading style. How can you know what fits your personality if you don’t know what’s out there? Finally, decide and take the leap of faith.
24. Screen time alone won’t help you. Again: review. REVIEW! You need an effective feedback loop or you will repeat the same mistakes again, and again, and again. There is no learning by doing in trading.
25. You don’t need to be hyper intelligent to be a trader. The best traders I know are “simple” minds. They do what works, they have no ego, and they disregard what does not make sense to them.
26. Do not have monetary goals. Have process-oriented goals.
27. Do not look at your P&L during your trading session or you WILL trade your P&L. Before and after a trading session, the money in your account is money, yes. During the session, however, the money in your account is ammunition that has to be spent in order to acquire more ammunition, if that makes sense.
28. If you read only two books about trading, these should be Pitbull by Marty Schwartz and Diary Of A Professional Commodity Trader by Peter Brandt.
29. Trading with the trend is not easier than trading against the trend. Trading with the trend is the last thing I learned and every single trader I know seems to have the hardest time following a trend.
30. If you want to pay for education, do your research. It is very possible to differentiate the scammers from the real traders. If something sounds too good to be true, run as fast as you can.
31. Never forget to be grateful at the end of the day. You are given the chance to make money by clicking a mouse from the comfort of your home. How many people on earth can say the same?
32. Trading fulltime is often romanticized but can quickly turn into a social nightmare. Keep up that work-life-balance.
33. Find other mental challenges for your brain than trading. Feeding your body McDonalds everyday will, and nothing else, will kill you. Trading every day without reading a good novel once in a while will make you braindead.
34. Twitter is actually a really good place to learn trading and to connect to great minds, unlike most forums, where 95% of posts are rubbish.
35. Likewise, there are lots of videos on Youtube with quite good content. You need to find a way to distinguish the goodies from the baddies.
36. Don’t be mistaken, trading is gambling. You want to be a professional gambler? Make up your mind.
37. A structured pre-trading routine is one of the best things you will ever do in your career as a trader. Take your time to create and establish it.
38. Learn your basic and classic price patterns such as Head & Shoulders, Wedges, Triangles, etc. It takes a week to get them all into your head and you will profit from that knowledge for years to come.
39. Never pick tops and bottoms. Take the middle of the moves and your results will improve.
40. Believe in your abilities and trust your strategy or you will be destroyed.

That’s it for now. I have plenty more of these in my tattered and very, very old notebook. Which do you agree with, which not?