I am often asked two questions by traders. Understanding the answers to both questions will make you a lot of money.
Not understanding the answers to these two questions means you will make lots of mistakes that cost you capital and lost profits.
So, let me ask you, if you could identify your biggest mistakes as a trader- what would they be? If we were chatting, I would also ask you how much those mistakes cost you in capital and/or lost opportunity.
Further, if you understood why you made the mistakes, so you do not repeat them, how much would that be worth to you in profits gained and losses avoided?
For some of you it could mean thousands and others possibly millions. At the very least, if you knew the answer to the questions you could stop or greatly reduce the losing trades. Think about it. If you were able to cut your losing trades in half, how much is that worth to you?
In this article, I’d like to share with you a story about one big mistake an experienced trader made over and over and over again before he asked for a little guidance. Sadly, in making this mistake over and over, it cost him millions.
What are the two questions, you ask?
- When is the best time to get in?
- When is the best time to get out?
On the surface these questions may seem a little silly for a trader to ask, however, not really, as not knowing the answer to these questions is why the majority of traders fail.
Let me assure you that many who tell us that they are experienced traders struggle to give succinct answers to these questions. Why? Most traders think they know, when in reality they are mainly guessing, which is close to gambling.
The story I will share with you, I do so in the hope that you are not making the same mistakes, or if you are, you stop repeating them. Remember, really understanding these two questions ought to be part of a solid, structured process for trading that could one day make you millions.
A few years ago an experienced trader shared that they had mixed results, and what I am about to share with you changed the way he thought about trading, and his fortune. Regardless of the time frame you want to trade, I find this key element missing from the processes of most traders, particularly those who trade short term, where the focus is typically on daily charts, or even shorter time frames.