Every successful forex prop trader or other small business owner sets a course with milestones leading to specific objectives. And, when limited account sizes are traded using maximum leverage, the chosen goals must be realistic and well-planned. Most importantly, it’s better to work on eliminating trading mistakes rather than to focus on meeting performance targets alone.
As a trader, it’s important to “own” the results of each trade, whether good or bad. Like children, new traders grow and mature by taking personal responsibility for their trades and learning from them, no matter the outcome of any single trade. It’s a journey to build a trading success story.
A trader should rejoice at each winning trade, and plan for further successes by carefully reviewing why that trade was profitable. By doing so, winning becomes a well-planned routine.
Likewise, with each painful loss a trader should learn something, and find a way to do things differently during the next trade. Successful prop traders know each lesson learned is valuable, regardless of whether that trade was a winner or loser.
Passion and planning
For a prop trader, the thrill of trading is just as important as the financial gains. For anyone contemplating a career in prop trading, passion is just as important as planning for success. Yet, passion alone isn’t enough to ensure a trader’s survival.
If a trader is motivated only by the idea of buying exotic sports cars and scantily-clad women, he’s not likely to last over the long run. Good planning is also essential. For traders who are caught up in the excitement and overconfidence of a series of profitable trades, it’s better to focus on what’s already been accomplished, then learn from it and build upon it, instead of overreaching.
Regular, objective reviews of trading performance are the forex prop trader’s best way to improve profits. As mentioned above, when you’re using an already-winning system it’s easy to earn more money simply by identifying and avoiding ever-smaller errors over time. Ask any football coach – Most games are won by whichever team makes the fewest errors.
Maximum leverage requires maximum planning
The power of extreme leverage requires careful planning and quick learning. Losses can occur very suddenly. Have you thought about how you’d handle that situation?
Shaun and other leading prop traders take personal responsibility for their trading outcomes, and they’re quick to learn from their results, both good and bad. Also, they avoid becoming greedy – each month, they pull profits from winning accounts, so accounts stay small.