9 Minute Read

Trade what you know, study what you don’t

November 10, 2014

By | 2 Comments

Monday’s are a busy day for me as a trader and coach.  I don’t do much work on Sunday’s, because of my fan-boy type addiction to the National Football League.  So when I start work on Monday morning I generally have emails to catch up on, watch-lists to manage, trades to adjust and goals to set.  Monday’s are go time.  And I love the energy of it all.

One thing I do on Monday’s is teach and guide other traders.  I was talking to one of my students today and she said something that struck me as interesting so I wanted to talk to the Tackle Trading group about it.  We were looking at a Debit Iron Condor on GPRO and talking about how to build the strikes, why the strategy works, how it works and so on and so forth.  She then said “I wish I would have known this a month ago.”

I paused.  Thought about it and replied “just imagine the things you’ll learn next month that you’ll wish you would have known today.”

Learning to trade is a journey.  It’s a never ending journey.  Your education will never stop.  It doesn’t mean it will always be as strenuous as it is in your first year in the markets – but it will never stop.  Not if you’re doing it right anyway.  As a trader, you should trade what you know and study what you don’t.  If you’re brand new and only know how to trade stocks – that’s great!  Focus on trading stocks.  If you’re comfortable with selling covered calls but the 4 legged Condor spreads are too much – then become great at Covered Calls.  Trade what you know, study what you don’t.

Most traders have both live and virtual accounts.  I’ve been trading for 10 years and I still keep a virtual account.  Why?  Because when I want to practice something that my brain finds interesting, but I haven’t perfected yet, I’d rather work it out in paper for a few months before using it with real money.  Because I put asset protection as the highest priority for a trader.  Avoiding risks, and protecting capital, are your major goals.  Profits will be there as you get better.  First, try not to take too many hits or draw downs.

So here’s the question you should be asking yourself?  Where do I want to start?  And what do I KNOW how to do the best?  That’s where you should spend the most time.  Trade what you know…..

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2 Replies to “Trade what you know, study what you don’t”

  1. Ali Tahta says:

    Hello
    this is a nice way of explaining the way of thinking a new trader should have. I encountered a funny situation since I started trading a months ago, whenever I use paper money I make money with delta trades using contingency order, when I shifted to real money because I felt confident I start losing money, it felt weird. I know it will take some time to learn and master trading, you guys make it look easy.
    I just want to share my experience.
    I appreciate what you all do for us here at tackle trading. Truly it’s life changing.

  2. Matt Justice says:

    Ali, its a constant learning curve. The market the last 3 weeks was not easy for anyone. 🙂

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