9 things you Need to Know to Be a Profitable Trader

Trading A New Beginning

As we start the new year, I thought it would be beneficial for everyone to get back to some basic learning as a market trader. Since learning is a journey, it is important that we seal those fundamental areas so that we can solidify our trading journey and continue to grow our trading account as we learn. With that, here are some useful lessons that I believe is crucial if you want to become a profitable trader. Hope you can start today like a new beginning. 

1         Learn About Yourself

Many new traders seem to think that they are all set to trade the market just because some of them were successful in other areas of their life. While this has probably the least relevance to the financial market, it is probably the most important area in trading that you need to learn.

Learning about yourself is crucial if you want to understand how you will react to the market when trading opportunities arise. You also want to understand how you can maintain consistency in trending, reversing and ranging market conditions.

2         Learn the Market

Pick a financial market and start watching it. If you’ve watched it long enough, you’ll realise that there are repeatable patterns.

Every trader has a different experience from trading and they learn the market patterns through their own experience. Of course, there are some traders who learn through trading courses and they pick up those patterns in a more structured and guided environment.

How ever you do it is fine but they key is that you must learn and identify those repeatable patterns before you can fully appreciate how one can take advantage of the market. As they say, the financial market is like a map that unveils itself from time to time, once you know how to navigate the map, the treasure are yours to enjoy.

3         Learn Your Trading System

trading systemThis is probably one of the easier areas to learn. Although most traders spend most of their time learning about a trading system but they fail to combine the trading system with the learning from point 1 & 2.

A good trading system is like a good car. However, unless you have a good driver and a good sense of direction (of the market), the car is has little or no value. In fact, driving the car with a bad driver and a poor navigator will cause more harm.

The same applies in the financial market and, hence, every trader needs to cover the other areas mentioned above.


4         Learn Your Money Management

Learning how to manage your money is crucial since trading the market will require you to invest money in the market before you can potentially see any gains.

Learning where to place your stop losses as part of manage management will require some insight into your personality. Some traders need to see their account being drip filled and are happy to miss out the big runs while other traders don’t mind having take many frequent small stops and try to harvest profits from the few large winning trades. As mentioned, this really goes back to your own personality and back to how much you know yourself.

5         Learn Your Risk Management

Since the opposite side of the coin to risk is reward, it only makes sense that all trader needs to learn a good risk management strategy to be able to reap the rewards from the financial market.

As the saying goes, “The House (casino) Never Losses”, this is mainly because all casinos invest in sophisticated risk management strategies, we should all aspire to be like the house and make an effort to learn risk management and to incorporate it with our trading system. Because a simple rule like trading at 1% risk per trade will make it very hard to lose all your money.

6          Learn Your Charts

Familiarise yourself with your charts and learn how to use the tools and features of your chart as much as possible. Because the chart is your window when you look at the market, every time the window changes, your view and relative understanding of the market you look at will be slightly different. Also, using the tools on the chart will help you analyse the markets easily and effortlessly. This is especially true if you are a chartist.

Do you realise that every time you change your chart, you feel some what uncomfortable? You feel some what more cautious? That is because your unconscious mind is not able to access the information that you normally have, it is still trying to learn how to navigate around that new chart. Hence, do not underestimate what your unconscious mind can detect on your charts.

7         Learn About Your Brokers

Understand how your brokers operate. Are they ECN brokers? Do they have a dealing desk? What much is the commission? Do they bank with a strong bank and is your money protected?

Also, understand that not all brokers are out there to squander your money. I have personally heard of traders who feel that the brokers are deliberately out there to cut their trades short. However, more often than not, that’s either due the big fat spreads or it could potentially be due to a technical fault which can be rectified.

Unfortunately, traders overlook this area and they end up wasting time and effort changing brokers unnecessarily.

8         Learn Your Trading Edge

Trading EdgeCombining all the above learning, it is crucial that you know your trading edge like the tip of your finger. Learning about your trading edge is about learning how you can use your advantage to tilt the probabilities in your favour.

Remember that this is a probability game and nothing more. You need to learn that having an edge is not about being invincible or being a champion. On the other hand, learning your trading edge is about just being there and being able to take money out of the market without losing all your profits.

9         Learn What You Don’t Need To Learn

While we all know that learning to trade is a long journey, there is definitely too much information out there and this is true especially in the online world. Information is passed on from one person to another in just a blink of an eye.

While investment in education is great, irrelevant information will just hinder your progress. Hence, it is crucial that you need to learn what you don’t need to learn. In other words, stay focus on making your trading edge perfect. Invest in time only on areas that can make your trading better.



If you are new to trading, then I hope some of these lessons will be invaluable to your trading journey. If you are a veteran, then I believe this should be a useful reminder each time we take a position in the market.


Thank you for reading and happy trading.

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