In the early stages of one’s trading journey they are likely to be introduced to the unfortunate adage: ‘’over 90% of traders fail’’. For the most part, this statistic is correct. Yet, if one looks deep into the construction of this statistic, they will find that it is mostly comprised of retail traders and not professionals; ergo, the failure rate is likely to be higher, as these traders are simply ill-prepared to enter the trading arena. The expectation is unrealistic as most retail traders are unprepared as they have not yet defined their processes and/or have misunderstood their role within the markets.
Navigating Modern Trading
That being said, it is difficult for retail traders to navigate in this modern era with the rise of social media. Outlets such as Instagram are teeming with pictures of young men driving Lamborghinis, trading by the poolside, and YouTube videos with appealing titles such as: ‘’Earn £10,000.00 a day for 15 minutes work’’― amazing, sounds appealing, sign me up! Sounds too good to be true… and it is. Right here and now I could list a plethora of material as to why the odds are stacked against the retail trader; howbeit, this would serve zero purpose and would be a total waste of energy. Instead of focussing on what we don’t have or lack, let’s talk about survival and the path to trading mastery…
Contrary to belief, it is not a case of methodology or strategy; there is literally a 1000 ways to skin the proverbial cat. Even the simplest strategies of moving average crossovers provide an edge. However, to execute effectively and know the limitations and optimum market conditions for said strategy, one must commit to trading mastery within their field of expertise and this is where most traders fall at the first hurdle and they do so for one reason and one reason alone ― it requires work: the dirtiest word in our industry.
Successful Trading Habits Are Crucial
At Feibel Trading, we have mentored traders from all walks of life and from all over the world. Regardless of region, net worth and/or any other distinguishing factor, within 30 minutes of meeting and discussing their day-to-day activities, we can tell whether or not the trader is on the correct path for success. Methodology and strategies are not mentioned as we focus on process and the daily habits of the trader and herein lies the secret, the golden key ― the traders ‘’habits’’.
The Cambridge definition of a habit is as follows: ‘’repeated action; something that you do often and regularly, sometimes without knowing that you are doing it’’.
From this very definition, one can deduct a great deal of information, yet what’s of value and of the utmost importance is the latter part of the sentence, ‘’sometimes without knowing you are doing it’’. This we refer to as muscle memory, an intrinsic part of the trader’s process to mastery. Once this level has been obtained by the trader, the charts open up and trades will literally jump out with very little effort required (as in the analysis) all of our energy is directed towards trade management and finding other opportunities.
A good metaphor to explain this concept is the process of beginning to drive a car. At the start, of all of our attention is focused on changing gear, checking mirrors and correcting hand grip. One can’t even communicate effectively to our driving instructor and the thought of changing the radio station on the first lesson is somewhat overwhelming; however, after time, and once driving has been committed to muscle memory, it’s amazing what we can do ― literally chalk ‘n’ cheese; one can now text, eat a sandwich, hold a 4-way conversation and, on occasion, we can even drive 20 miles or so without even thinking about the process and suddenly snap back to reality. Our sole focus whilst driving has shifted from process (now automated) to potential obstacles such as pedestrians, other drivers, road works or any other hazards; we are not mindful or thinking about the process any longer such as changing gear, looking in the rearview mirror, indicating etc.
Our process is achieved, or rather we are operating, from our subconscious (muscle memory) and these very principles apply to trading; our focus is no longer on the entry side of the trading equation but rather trade management and potential obstacles that may come into play such as areas of market structure, higher timeframe movement, price action aberrations etc.
Conclusion
In our next article, we shall discuss trader habits in more depth, the importance of feedback and why we at Feibel Trading are pioneers in trader development. Using our methodology and strategies, we are able to break down the trading process into manageable bite-size pieces, whilst helping to build the correct habits that will inevitably lead the trader to mastery, the feedback loop is crucial. Our programs are individually tailored as there no two traders alike, we all have our respective strengths and weaknesses.
