[Education] How To Be A Good Trader?
This might surprise you. I was actually a content creator on Youtube and blogs before I focus on trading. Trading was something I do on the side as I was trying to achieve consistency.
From young I already knew that I do not want to work in a 9 - 5 until I retire. I want to enjoy my life without worrying for money. I read a lot of books on personal finance, personal development and productivity.
To be good at something, you need at least the knowledge of a given topic. Knowledge is potential power. Action is power.
Stability Reduces Stress
I was lucky to have an actual framework and knowledge on how to keep and grow my money. I didn’t have to worry about money as I was spending way below my means, without sacrificing my hobbies.
It is important to have a stable income. I do not need to worry about being unable to pay bills, or to put food on the table.
This brings me to the next point. Since I have met my survival needs, I can spend more time and energy focusing on trading.
I have the savings and money to deploy in the financial market.
Building The Luxurious Lifestyle
Beginners are caught up with the idea that it is easy to get high win rate and high RR trades.
You want to learn how to trade because it’s lucrative. I don’t deny that. This business is very scalable. A 5% gain on a $100 account is $5, but a 5% gain on a $100,000 is $5,000. You take the same trade on different accounts, the profit can vary.
You want to enjoy life. You want to escape the 9 - 5 rat race. You want to provide for your family. You want to make your parents proud. You want to be a rich and successful person. Who doesn’t want that?
You can see many screenshots of people earning millions of dollar. They took high 100 RR trades and profiting tens of thousands of dollars per trade. These give the impression to beginners that they can do it too.
You enter the trading world with the wrong mindset. You want to earn thousands of dollars every week. But your capital is only $100. You think you can flip this account into tens of thousands of account. But you only get to see your accounts wiped out time and time again.
You don’t believe that you are not able to profit from the market. You talk to people who post screenshots of their profits and high RR trades.
You subscribe to their trade signals, account management, and expert advisors. You bought their trading course on demand and supply. Some mentorships tell you to put 3 technical indicators and follow the buy and sell signals. You put in more money since they are the ‘experts’. You might find small success here and there. But eventually, you are back to square one. Your account got wiped again.
You will never improve if you’re stuck in this loop. Trust me, you will NOT succeed.
Breaking The Loop
Solving this will ensure you will survive. You will meet your basic needs. You don’t need to worry about food, water and shelter. You won’t need to stress about not having enough to get by. You won’t need to worry about getting your electricity and water cut off. You won’t need to worry about your landlord coming after for rent. You’re not afraid of getting sick and being not able to afford basic healthcare.
You will get your life in order. You will get your personal finance in order. You know exactly how much your net worth is. You know how much your income a month is. You know how much your monthly expenditure is.
Once you know all these numbers, you are able to extrapolate how much you need at retirement. Knowing your net worth at retirement is crucial. I will write about how do you calculate for retirement in the future.
If you have all these figures worked out, you might not need to work so hard for the 100rr trading system. You can reach retirement earlier by investing your money into the S&P500. But the fact that you’re here, means you’re trying to aim higher isn’t it?
The point is that you have to understand your basic survival needs. If you are able to meet the basic needs through trading, you are a good trader. You don’t need to get 5 or 6 digits payout with constant 10% returns every month. All you need is a 2% gain on a $200,000 account which gives you a nice $4,000, trading from a beach villa at Maldives 1 hour a day.
Capital Issue
But Keeley, I need to have high RR trades and high returns a month to be able to trade full time. You’re right if you’re trading a small capital. If you only have $10,000, you will need 40% gain a month to get $4,000 of monthly income.
You can fix this with prop firms. With the rise if prop firms, it is easier to control large amount of capital.
If you’re consistent and profitable, it is not hard for you to pass prop firm challenges. To put into context, you only need 4% gain on a $100,000 account to achieve the same $4,000 you need.
What is a "good trader" to you? High RR? High profitability? High win rate? Able to quit your 9-5? There are many different definitions of good.
How good do you want to be?
To me, there's always room for improvement.
I do journaling to collect data.
Collect as many data points as you can. You can perform data analysis. Analyze them by session, day, time, duration, types of confirmation, month, pair. You know your max drawdown, unprofitable days, months, session, type of trade.
You know how your emotion plays a part in your trading results. Know your win probability, win rate, average RR, average stop loss size.
Being consistent and being able to profit from the market every week is good, at least to me.
What Is Learning?
I love the concept of trying new things. If you try, you will either succeed, or you learn. Think of what’s the worst that can happen to you. If you’re learning to be a trader, the worst that can happen to you is that you lose some money. It’s recommended that you start with paper money anyway. So the worst thing that can happen is that you lose a few days of your life. At least you can tell yourself that you’ve tried and it doesn’t work. You won’t have any regrets in the future.
Once you fail, you gain experience and knowledge. You can apply these skills to other areas in your life. In trading, you learn about risk management. You learn about the importance of being patient. All these skills compound. It’s not 1+1+1=3. It’s 1+1+1=5.
Now, what if you succeed? The upside is unlimited. You’re risking a few days of your life for a potential benefit that can change your whole life. You can be trading for a living, leaving the 9 - 5 life behind you.
All you got to do, is to try.
I failed a lot. I tried ecommerce, YouTube, private label drop shipping, affiliate marketing and more. All these taught me soft skills that are transferrable.
All these lead me to where I am today. A profitable trader with consistency.
Personal Finance Framework
A lot of people start trading live or forward testing. This is a wrong conception. You have to start with your personal finance.
Get your personal finance in order before looking for a side hustle. Yes trading for most people begins as a side hustle.
If you have bad debt, clear them first. Many of you have student loans or even consumer loans. Remember that these interests compound real quick if you don’t pay them off. Do not pay the least amount. Eliminate them completely, and fast.
Next, make sure you have consistent month cash flow coming in. This is to pay your bills and put food onto your table. This step will ensure your survivability.
Make sure you have savings. A rule of thumb is to have at least 6 months worth of expenditure saved up. You will need this money on rainy days. You can lose your job one fine day and will be glad to have this savings to buffer for the your next job. Medical bills can be huge. If you don’t have enough money, you might not get the medical attention you need. You might also need to resort to loans to pay off your medical bills. This brings me to the next point.
Insurance. If you’re young and healthy, get insurance. The premium tends to be cheaper when you’re young and healthy. The older you get, the more expensive the premium gets. It’s better to lock in the premium when you’re young as this will save you money in the long run. But you might be thinking, you’re young and healthy, you won’t fall sick. That’s what I thought so too, until I was diagnosed with pneumonia at the age of 25. I was working out 3 times a day and thought I was very healthy. Luckily for me, I had insurance which covered my medical bills.
There are also another school of thought. You might be thinking of skipping the insurance and investing the premium yourself. Now the risk here is that investing this amount of money does not guarantee a payout if you fall sick. Let’s say you’re 25 years old. Your insurance premium cost $1,000 a year and the coverage is $25,000. If you’re so unlucky to fall sick at year 2, you would have invested $2,000 in total into the stock market. Let’s say you’re a investing and trading genius and you manage to flip that $2,000 into $4,000. You're covered less than what the insurance will cover.
Insurance is as a hedge against big medical cost. It’s a balance between hedging and growing your net worth. It all depends on how you secure you want to be when the time you fall sick and you lose your employment income.
Achieve Consistency
Once you have your personal finance in order, you have already managed 70% of your survival needs.
It took me 5 years to achieve consistency. It can take you faster than 5 years. It will be hard for 1 or 2 years, but it will not stay tough forever.
Happy to say that I've made my second payout this month with a new Prop Firm.
My long-term holding portfolio is holding up great. This is due to good entries that I've made using technical analysis. Good technical analysis skills don't apply to Forex only.
I've always dreamed of and wondered how does it feel to receive big payments consistently. I'm not getting large payouts yet, but I'm already accumulating many prop firm accounts.
I focus on risk management, trade management, and trade psychology which I can control. By controlling what I can control, I am making my way to being a 7 figured funded trader.
Stay consistent. Stay safe. Success is just around the corner.
If you enjoy such content, feel free to click the like button and subscribe for more.
Let me know what are your thoughts and learning points in the comments below so others can learn from you too!
Please let me know what kind of topic you would like to read next :)
Happy weekend!
From young I already knew that I do not want to work in a 9 - 5 until I retire. I want to enjoy my life without worrying for money. I read a lot of books on personal finance, personal development and productivity.
To be good at something, you need at least the knowledge of a given topic. Knowledge is potential power. Action is power.
Stability Reduces Stress
I was lucky to have an actual framework and knowledge on how to keep and grow my money. I didn’t have to worry about money as I was spending way below my means, without sacrificing my hobbies.
It is important to have a stable income. I do not need to worry about being unable to pay bills, or to put food on the table.
This brings me to the next point. Since I have met my survival needs, I can spend more time and energy focusing on trading.
I have the savings and money to deploy in the financial market.
Building The Luxurious Lifestyle
Beginners are caught up with the idea that it is easy to get high win rate and high RR trades.
You want to learn how to trade because it’s lucrative. I don’t deny that. This business is very scalable. A 5% gain on a $100 account is $5, but a 5% gain on a $100,000 is $5,000. You take the same trade on different accounts, the profit can vary.
You want to enjoy life. You want to escape the 9 - 5 rat race. You want to provide for your family. You want to make your parents proud. You want to be a rich and successful person. Who doesn’t want that?
You can see many screenshots of people earning millions of dollar. They took high 100 RR trades and profiting tens of thousands of dollars per trade. These give the impression to beginners that they can do it too.
You enter the trading world with the wrong mindset. You want to earn thousands of dollars every week. But your capital is only $100. You think you can flip this account into tens of thousands of account. But you only get to see your accounts wiped out time and time again.
You don’t believe that you are not able to profit from the market. You talk to people who post screenshots of their profits and high RR trades.
You subscribe to their trade signals, account management, and expert advisors. You bought their trading course on demand and supply. Some mentorships tell you to put 3 technical indicators and follow the buy and sell signals. You put in more money since they are the ‘experts’. You might find small success here and there. But eventually, you are back to square one. Your account got wiped again.
You will never improve if you’re stuck in this loop. Trust me, you will NOT succeed.
Breaking The Loop
Solving this will ensure you will survive. You will meet your basic needs. You don’t need to worry about food, water and shelter. You won’t need to stress about not having enough to get by. You won’t need to worry about getting your electricity and water cut off. You won’t need to worry about your landlord coming after for rent. You’re not afraid of getting sick and being not able to afford basic healthcare.
You will get your life in order. You will get your personal finance in order. You know exactly how much your net worth is. You know how much your income a month is. You know how much your monthly expenditure is.
Once you know all these numbers, you are able to extrapolate how much you need at retirement. Knowing your net worth at retirement is crucial. I will write about how do you calculate for retirement in the future.
If you have all these figures worked out, you might not need to work so hard for the 100rr trading system. You can reach retirement earlier by investing your money into the S&P500. But the fact that you’re here, means you’re trying to aim higher isn’t it?
The point is that you have to understand your basic survival needs. If you are able to meet the basic needs through trading, you are a good trader. You don’t need to get 5 or 6 digits payout with constant 10% returns every month. All you need is a 2% gain on a $200,000 account which gives you a nice $4,000, trading from a beach villa at Maldives 1 hour a day.
Capital Issue
But Keeley, I need to have high RR trades and high returns a month to be able to trade full time. You’re right if you’re trading a small capital. If you only have $10,000, you will need 40% gain a month to get $4,000 of monthly income.
You can fix this with prop firms. With the rise if prop firms, it is easier to control large amount of capital.
If you’re consistent and profitable, it is not hard for you to pass prop firm challenges. To put into context, you only need 4% gain on a $100,000 account to achieve the same $4,000 you need.
What is a "good trader" to you? High RR? High profitability? High win rate? Able to quit your 9-5? There are many different definitions of good.
How good do you want to be?
To me, there's always room for improvement.
I do journaling to collect data.
Collect as many data points as you can. You can perform data analysis. Analyze them by session, day, time, duration, types of confirmation, month, pair. You know your max drawdown, unprofitable days, months, session, type of trade.
You know how your emotion plays a part in your trading results. Know your win probability, win rate, average RR, average stop loss size.
Being consistent and being able to profit from the market every week is good, at least to me.
What Is Learning?
I love the concept of trying new things. If you try, you will either succeed, or you learn. Think of what’s the worst that can happen to you. If you’re learning to be a trader, the worst that can happen to you is that you lose some money. It’s recommended that you start with paper money anyway. So the worst thing that can happen is that you lose a few days of your life. At least you can tell yourself that you’ve tried and it doesn’t work. You won’t have any regrets in the future.
Once you fail, you gain experience and knowledge. You can apply these skills to other areas in your life. In trading, you learn about risk management. You learn about the importance of being patient. All these skills compound. It’s not 1+1+1=3. It’s 1+1+1=5.
Now, what if you succeed? The upside is unlimited. You’re risking a few days of your life for a potential benefit that can change your whole life. You can be trading for a living, leaving the 9 - 5 life behind you.
All you got to do, is to try.
I failed a lot. I tried ecommerce, YouTube, private label drop shipping, affiliate marketing and more. All these taught me soft skills that are transferrable.
All these lead me to where I am today. A profitable trader with consistency.
Personal Finance Framework
A lot of people start trading live or forward testing. This is a wrong conception. You have to start with your personal finance.
Get your personal finance in order before looking for a side hustle. Yes trading for most people begins as a side hustle.
If you have bad debt, clear them first. Many of you have student loans or even consumer loans. Remember that these interests compound real quick if you don’t pay them off. Do not pay the least amount. Eliminate them completely, and fast.
Next, make sure you have consistent month cash flow coming in. This is to pay your bills and put food onto your table. This step will ensure your survivability.
Make sure you have savings. A rule of thumb is to have at least 6 months worth of expenditure saved up. You will need this money on rainy days. You can lose your job one fine day and will be glad to have this savings to buffer for the your next job. Medical bills can be huge. If you don’t have enough money, you might not get the medical attention you need. You might also need to resort to loans to pay off your medical bills. This brings me to the next point.
Insurance. If you’re young and healthy, get insurance. The premium tends to be cheaper when you’re young and healthy. The older you get, the more expensive the premium gets. It’s better to lock in the premium when you’re young as this will save you money in the long run. But you might be thinking, you’re young and healthy, you won’t fall sick. That’s what I thought so too, until I was diagnosed with pneumonia at the age of 25. I was working out 3 times a day and thought I was very healthy. Luckily for me, I had insurance which covered my medical bills.
There are also another school of thought. You might be thinking of skipping the insurance and investing the premium yourself. Now the risk here is that investing this amount of money does not guarantee a payout if you fall sick. Let’s say you’re 25 years old. Your insurance premium cost $1,000 a year and the coverage is $25,000. If you’re so unlucky to fall sick at year 2, you would have invested $2,000 in total into the stock market. Let’s say you’re a investing and trading genius and you manage to flip that $2,000 into $4,000. You're covered less than what the insurance will cover.
Insurance is as a hedge against big medical cost. It’s a balance between hedging and growing your net worth. It all depends on how you secure you want to be when the time you fall sick and you lose your employment income.
Achieve Consistency
Once you have your personal finance in order, you have already managed 70% of your survival needs.
It took me 5 years to achieve consistency. It can take you faster than 5 years. It will be hard for 1 or 2 years, but it will not stay tough forever.
Happy to say that I've made my second payout this month with a new Prop Firm.
My long-term holding portfolio is holding up great. This is due to good entries that I've made using technical analysis. Good technical analysis skills don't apply to Forex only.
I've always dreamed of and wondered how does it feel to receive big payments consistently. I'm not getting large payouts yet, but I'm already accumulating many prop firm accounts.
I focus on risk management, trade management, and trade psychology which I can control. By controlling what I can control, I am making my way to being a 7 figured funded trader.
Stay consistent. Stay safe. Success is just around the corner.
If you enjoy such content, feel free to click the like button and subscribe for more.
Let me know what are your thoughts and learning points in the comments below so others can learn from you too!
Please let me know what kind of topic you would like to read next :)
Happy weekend!
Prop Firm Funded Trader
Find out more about me here: linktr.ee/kt_fx
Find out more about me here: linktr.ee/kt_fx
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