Feeling frustrated with your investing? You’re not alone.
Hundreds of thousands of people decided to start investing in the last few years, and most of them have no idea what they’re doing beyond suggestions from anonymous users on Reddit.
The doors to investing have opened up to the world beyond Wall Street, and now many novice investors have yet to see any significant returns from their investing, making it clear that maybe those masters degrees in business were worth something after all.
That doesn’t mean you have to have an MBA to successfully trade on the stock market. It does mean that you have to do your homework and stop viewing trading as just “a hobby.” Taking a relaxed approach to trading is fine — as long as you don’t care about profits.
But if you’re trading to help build a brighter financial future for you and your family, then you have to view trading like a job. You have to put in the hours and you have to show up every single day.
So what does taking a serious approach to trading look like? So glad you asked. Here are three of the best ways you can level up your investing game — right now.
Make A Plan
Do you have a plan for how you are going to trade this month? No? Well, that’s a problem.
If your trades are made on random variables or daily mood swings, then the results of your trading will look the same: unpredictable and inconsistent.
By making a plan for each week and month, your progress can be tracked, allowing you to draw conclusions about what strategies are working and which ones are not working.
You want to explore relevant charts and choose specific entry points for your trading. Rinse and repeat until you have a long list of entry points for your strategy. Stock trading necessitates agility and timing. Keep practicing with these entries until they happen exactly when they are supposed to. You’ll get there eventually.
The financial ecosystem is complicated. It was made that way.
The only path toward expert understanding of how to navigate this system is through a structured approach to trading. That means showing up at the same time every day, like a “real job,” and embracing a disciplined approach to learning.
Matt Choi, who runs the trading education site Certus Trading, said a lack of structure sets up new traders for failure.
“After a while, I realized that the biggest reason why traders haven’t been successful is because they lacked structure in their trading,” Matt Choi said. “They’d be trading stocks today, and then jump to commodities tomorrow. They’d get distracted listening to financial news networks, which often contradicts their own analysis. They didn’t have a plan and if they did have one they weren’t disciplined enough to follow it. And as a result there is a lot of analysis paralysis going on, and they just can’t move forward with their trading.”
Update Your Plans Regularly
Once you’ve made a plan and followed it for a month, you have enough hard data and experience to start making updates to how you trade. Then, you take those slight changes to your approach and practice those for another month.
This monthly approach avoids making decisions based on isolated incidents, like individual trades, and focuses on the macro results that give you a better picture of what strategies really perform.
As the Corporate Finance Institute wrote, it’s all about “discipline and patience.”
“Discipline and patience are two very closely related skills that every master trader needs – in abundance,” according to their article “Six Essential Skills of Master Traders.” As we mentioned above, staying in the game is important because it allows you to experience both the highs and the lows, learning from them and making the necessary adjustments to your trading. A master trader must be both patient and disciplined in order to stick with it, especially on days when profit is non-existent.
Smart traders tackle one problem at a time. Start each day with a simple goal and make sure you complete that goal. With that kind of mindset, you should find yourself improving your trading — and understanding why.