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Most people would like to believe that they are on the fast track to becoming successful in their profession. To be at the top of most professions, you are generally required to earn a specific undergraduate degree, followed by a relevant Master’s Degree and, finally, a Doctorate. But, a set of academic degrees or extensive professional training has not been considered necessary to be a successful trader until recently.

 

The news that trading is a difficult profession in which to excel has yet to penetrate the general public. The general representation in advertisements on television makes trading look exceedingly easy. These ads would have you believe that all you need to make a million dollars is a computer connection to the Internet. However, that is the fast track to losing millions of dollars.

 

Here is an outline of what it takes to be a successful trader.

 

1. Become familiar with trading in many areas to see which areas evoke passion in you that will motivate you to take the next steps.

 

2. Develop a model of successful traders by reading books with interviews of successful traders and by attending conferences. In this way, you will discover what specific areas of trading fit your personality and resources. 

 

3. Read books, take courses, and attend seminars that focus on your particular trading specialty. 

 

4. Compose a plan with everything that would be in a normal business plan including your system and methodology. Your methodology should include contingency planning for everything that can go wrong and everything that can go right, plus an action strategy for each contingency. This plan should be created even if you plan to work for someone else.

 

5. Test your system. When you are confident that by following your rules, you can make money, then you are ready to start trading. 

 

6. Have yourself evaluated psychologically to discover your strengths and weaknesses and how they affect your ability to be disciplined enough to follow your rules. You could take this step before you actually begin trading real money. I recommend taking my Trader’s Evaluation where I can tell you the issues you will be dealing with before you start trading.

 

7. If there are psychological issues to be addressed, do what is necessary to handle them by reading the right books or by obtaining counsel from a trader’s coach. These issues must be addressed because they will not simply disappear. Instead, they will grow with time and cost you considerably in the process of becoming a trader. 

 

8. Be consistent about following your trading rules. If you are consistent, you can reevaluate your system or methodology after a time and improve upon it.

 

9. Periodically review your plan and adjust it to what is happening in the markets.

 

Trading is a profession that is usually viewed by the general public as a get rich-quick scheme that you can start without preparation, training, or education. The reality is that trading is a highly competitive career that requires finely honed skills, education, training, and experience just to make an average living.

 

A trader must approach his profession as a business and have a business plan in place in order to make money. In addition, unlike most professionals, traders must have psychological balance that allows them to deal with levels of risk that are unique to this field. Thus, a trader’s preparation includes fulfilling a series of steps before he can reasonably afford to risk his money in real time.

 

By Adrienne Toghraie - Adrienne Toghraie is the founder of Trading on Target and is the author of multiple books on trading and the psychology of trading. She is considered an expert in the financial community for coaching traders, brokers, and investors to their next level of success. This excerpt was taken from The Trading on Target E-Book.