Finding Your Trading Edge
Every consistently successful trader I have encountered in my journey has some sort of trading edge. Everyone's edge is different, kind of like a fingerprint. They may look the same, but everyone does something just a little different than the others to set themselves apart. This is just like anything in life, why would the financial markets be any different?
You can sit around all day long, watch other traders on YouTube and attempt to mimic their moves, but will their strategies really work for you? The only way to find out is to get out there and start trading! But wait... You do need some training before you go into battle, just like any warrior. Let's face it, the markets are a battlefield.
1. Choosing Your Weapons
Every warrior has a weapon of choice. For me, it's an AR-15 rocking some .223, a 9mm on my hip, and a medium-sized, razor-sharp machete, which I am as efficient as a ninja with a katana, lol... Oh wait, wrong post, we are talking about trading... That's a whole other topic, lol...
But in trading, you have your weapon of choice as well. You will hear different traders talk about different indicators and this and that, and have a bunch of stuff all over their charts, and that may work for them, but you have to find what works for you.
I am a huge fan of using volume profiles, VWAP, supply and demand zones, reading momentum as well as order flow. These are my weapons of choice, and once you figure that out for yourself, then you will need to start sharpening your edges to make sure that when the time is right, you will be able to cut through those markets like butter!
2. Sharpen Your Edges - PRACTICE
Now that you feel comfortable with your weapons of choice, you need to become an expert at using those tools. Part of my edge is that I really only trade Bitcoin and Ethereum. This allows me to focus on those charts and allows me to become an expert at reading those charts and figuring out what moves I am going to be making.
It's like with anything in life, the more you study and practice, the more prepared you are and you will perform better when the time is right. Just like a ninja or a sniper, you have to know exactly the right time to strike. This is the same in trading. The only way to do this is to train like a warrior!
'Paper trading' is the best way to get started. This way you are not risking any money and you can get started reading and charting without any risk. I do this by finding chart setups and marking where I would enter and exit the trade, and see if the trade went in my favor. If it did not, I would figure out what I missed and try to re-adjust. The key is practice, practice, practice.
3. Start With Small Amounts Of Risk
Once you feel comfortable with your trading edge, you have practiced in the charting dojo, and you want to get out and get your feet wet on the battlefield of the live markets, then you can get started with a small amount of money to get some skin in the game.
Trading with live money is different than paper trading because you are actually putting something on the line, your capital, which in terms of a battle, your capital is your life. Think of it like playing Super Mario, you start out with a certain number of lives, and when you mess up and die, you start over with one less life. That is like trading. Your money is your life, so you want to protect it at all costs. If you lose a bit of money, that's okay, you are still in the game, but try and learn from your mistakes so that you don't lose it all!
Keeping a tight stop loss is the way to preserve capital. If you lose a little bit, that's okay, because when you are right, you will make up for the small amount you lost. Think of it as getting a life mushroom, you get that 1UP and it's like the loss never happened. The more 1UPs you get, the longer you can stay in the game.
4. Resharpen Your Edge
Every blade needs to be resharpened to continue to be a good tool. Our trading tools are no different. Sometimes, we get into a rut, where we need to figure out something a little different because our strategy may not be working out. This is where you step back from the battlefield and get back some charts, lick your wounds, and figure out what went wrong.
Live trading can get stressful and exhausting so everyone needs to take a step back and reflect. This is when you go through your trades and see where things were working and where they were not. Maybe you need to adjust your strategy, timeframes, etc.
The thing about trading is that nobody has ever arrived. There is always something changing and evolving. As traders, we have to stay sharp and keep up our game to compete on the global stage.
5. Once You Find Your Edge... Stick To It
Once you figure out what you are good at, and what gives you your trading edge, stick to it! Don't keep moving around and trying different things because this person or that person said this or that, stick to what you are good at and what works for you!
Trading is a business, let's face it. Many retail traders just look at it as a gamble and not a lively hood, and that is what gets them wrecked in the markets. Retail traders need to essentially 'know their place'. By this I mean, you do not have enough money to move the markets, at least most of us don't, so that is why we need to be able to read the market movements and ride the waves of the whales. Too many retail traders think they can move the markets, only to get trampled.
Hope this post helps you to focus on what works for you in trading. Remember to sharpen your edge, keep it sharp, and you will begin to become consistently profitable!
Until next time traders...
Be Cool, Be Real, and always Abide!
Nothing said is financial advice.
This is for educational and recreational purposes only!
Stay safe in these volatile markets and don’t get rekt!
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