Rookie Corner : Lets go hunting! Part III | Tackle Trading: The #1 rated trading education platform

Rookie Corner : Lets go hunting! Part III

 

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Hey Rookie Traders!

This week’s blog is going to address some common issues that Rookie traders face and of course, we will update our MRK trade.

When most folks begin trading they have a certain image of what trading is or what it can do for us as individuals.  These images come from many places.  Sometimes they come from the images we see in Hollywood, such as movies like Wolf of Wall Street or Trading Places.  The image can also come from the images that the actual Wall Street puts out into the world.  The financial industry shows us the private jets and the huge mansions and the crazy returns but that is mostly only the money managers and the upper echelon of the investment banks or hedge funds.  These images can give us a distorted view of what trading actually is.  The first thing that we usually realize is that there is a very big difference between hedge funds and retail traders.  As retail traders, we don’t get office buildings full of people to do our research for us we have to get into the markets and find our own way.  We also don’t have the power to move markets where we would like them to go because we lack the size that is required for that ability.  This is just a few of the differences between what we see and the reality of trading, there are many more but I think this paints an accurate picture.  Now, this might not sound very glamorous but let me tell you what trading actually is for us retail traders,  it is an opportunity to change the way we view money.  Most of us grow up thinking that we have to go to school and then go out and get a job to earn money.  This is definitely one way to live and it is by far the most popular way for people to go through life. This is where trading shines, it can be a different way to live, in my opinion, it can be a better way to live but that is just my opinion.  Trading can show us that instead of us earning a living by working for others we can go to work for ourselves.  Here is the mistake that most folks make when they get into trading or investing, they think they can just go through some money into the market and it will do the work for them.  This could not be further from the truth.  Trading requires work!  It requires commitment.  It requires sacrifice.  It requires all of this and more but here is why trading is great, all the work we do, including the learning, the researching of trades, the journalling of the trades, the winning and the losing trades and everything else that we deal with in the game of trading, is just for us!  The hard work that is put in by you benefits only you!  You are completely the master of your domain.  The harder you work the better the results you get and there is no one to stop you except you.  That is why trading is the best way in the world to make a living, in my humble opinion.

There are a couple of pitfalls in trading that I want to speak about this week and this applies to all rookie traders.  Those are confusion and indicator reliance.  The thing that I notice most with rookie traders is the confusion that presents itself when you first start trading.  There is a lot of jargon to learn and there is a boatload of strategies to learn as well as actual market experience to gain.  All of this tends to way heavily on most rookie traders, they try to learn too much too fast.  So know this, the financial markets have been around forever and they will still be here many years from now so its ok to slow down and take your time to learn what you need to learn to be effective in the markets.  The second thing I see from a lot of rookie traders is they are all looking for that one thing that will unleash the big profits.  I have heard this called the “big score!”  It is natural to think like this but we must work very hard to guard against this type of thinking because it is a fool’s errand.  The way this type of thinking tends to manifest itself is in the use of indicators.  In the TOS platform alone there are several hundred indicators.  What a lot of rookie traders do is look for that one indicator that will shower them with winning trades.  I hate to be the bearer of bad news, this indicator does not exist.  Some indicators work well sometimes and then don’t work at all in different market conditions and therefore we need to understand how to use indicators so that they benefit us instead of harming us if that is all we rely on. We must know that indicators work in conjunction with other forms of technical analysis but that they do not stand alone.  If we understand this then we can use them to enhance our trading which is exactly what they are designed to do.  If we understand this fully then we can avoid the mistake of indicator reliance and our bankrolls, or trading capital will thank us at some point.

These are just a couple of mistakes that rookies sometimes find themselves facing and hopefully, you can avoid these and concentrate on running your trading business at maximum efficiency so that you can benefit from all your hard work.

Take a look at the video below,  I have updated the MRK trade and discuss what is next for this trade.

Happy Trading!!

Happy Trading!

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