Too many traders think that trading has to be hard and complicated — but the reality is that good trading is simple.
We all have people who inspire us, right? They might be athletes, actors, or traders. Whoever they are, these people help motivate us to be better at what we do.
And when our heroes or inspo-crushes are in their element, they’re confident … and they make things look so easy. Just think of the traders you look up to…
I can promise you that when it comes to trading the stock market, it isn’t easy at all. But successful traders make it look that way. And they have certain things in common.
And the really good traders know a few crucial tips that they go back to again and again…
Table of Contents
It’s Not Just About Working Hard
Successful traders don’t just work hard — they also work smart.
A solid work ethic is great … unless it’s working against you. See, if you work hard at the wrong things, you can actually move against your goals. It can happen to the best of us. Some traders go overboard trying to learn and trade it all.
But it’s not an effective way to learn or to trade. It’s just too much. Here’s something key to remember…
K.I.S.S.
I love the acronym K.I.S.S.: keep it simple, stupid. Good trading is simple.
If you overcomplicate your process, you can actually make it harder on yourself to learn and improve. You’ll likely be pulled in too many directions. It’s confusing and really unnecessary.
On the other hand, as you simplify things, you’ll find that you’ll improve more quickly and the learning process can become much easier.
Read on to learn how you can keep your trading simple so you work both hard and smart.
Start Big, Then Go Small
If you’re a newbie trader, it’s easy to feel overwhelmed. There’s so much to learn — so how do you know where to start?
First, fully vet every source you use. Make sure you study with reputable, transparent traders. If you aren’t selective in who you study with, you can end up studying information that may be contradictory. That’s definitely confusing.
Make sure to follow instructors who actually trade successfully. Check their wins and their losses. Check their trading history. Unfortunately, there are lots of fake gurus who love to take advantage of less-experienced traders.
The best teachers will train you to think for yourself so you can trade through anything.
Then, consume as much information as possible. Read articles, watch videos, and read books. Go big but with the intention of eventually going smaller.
You want to get a good broad view of the markets — terminology, strategies, and niches. That can help you decide where you want to focus and dive deeper.
For example, after learning about different trade setups, you may decide that shorting stocks is too risky. Once you decide you want to trade long, you can then hone in on long strategies.
It’s still smart to understand how the larger market works because it can affect how you trade. And it’s great to work with a mentor who can help you avoid common trading mistakes and find focus.
At StocksToTrade Pro, we help our members through the basics and beyond so that they learn to trade smart every day. It’s a great community of traders who strive to do better through mentorship, educational webinars, chat rooms, and so much more. Join us today!
The Power of No
You can’t do it all. And really who wants to? Just saying no can be a powerful force in simplifying your process. It’s how you clearly eliminate what you don’t want or don’t vibe with.
As you gain experience, you’ll start to understand what won’t benefit you. That can give you clarity on what really matters to you.
For example, if there’s a particular trade setup you just can’t nail, you can eliminate that setup and possibly avoid costly trading mistakes.
It’s great to say no. It can save you from a lot of heartache. And it can make your yeses more powerful.
Make Your Yeses Count
It’s great to know what you don’t want, but it’s also important to know what you want.
When you start realizing what you’re good at, you can focus on getting better at those strategies. That can help you increase your understanding faster in a less stressful way.
So learn to say yes, but do so selectively. Let’s look at some areas where it’s smart to limit your yeses.
Market Exchanges
There are a lot of different markets that you can trade in. Different markets have different stock types and price actions. I often remind traders to know what they trade. Limit your yeses to a certain market to help you better understand which stocks work for you and your strategy.
Once you really get that market, you can branch out from there.
Watchlists
A watchlist is a list of stocks that are serious candidates for your trading day. In StocksToTrade Pro, we build a watchlist as a team every morning before the market opens. We want to start every trading day prepared, with a jumpstart on which stocks we want to pay attention to.
We might start off with 10 stocks on our list — but that’s too many yeses. So the closer we get to the open, we usually cut it down to one or two. Any more than that can cause confusion and get in the way of research and solid decisions.
Price Ranges
Price ranges are another thing that you can limit. You might like higher-priced stocks because you understand the price movements better. Or, if you have a small account, you might want to limit your trading to stocks between $1 and $15 so that you can buy more shares.
Indicators
There are lots of different technical indicators you can use on stock charts. So many, in fact, that it can be really easy to get confused. Remember, indicators are really only useful if they help you make smart decisions. I like to keep things super simple, so I mainly use an indicator called VWAP. It measures both volume and price — two of my favorite things I use to determine if a stock is worth my time.
These are just a few examples of how you can limit your yeses and help you think smarter.
Limit Your Distractions
Another way to simplify your trading is to limit your distractions. Seriously, it sounds so basic but it’s true.
I love to read … and if like me, you study books on the brain, you can find studies on how limiting distractions can help your brain work more efficiently.
Listen, your attention is like a spotlight … it can only focus on limited areas at one time. If you’re paying attention to one thing, there are so many other things outside of your focus.
Don’t fight it. Use your brain and its amazing powers to help you.
Turn off the TV when you’re trading. Even if you have financial news on the tube, it won’t give you an edge. Financial news networks aren’t in the business to make you a better trader. Instead, you’ll be surrounded by opinions and doom-and-gloom that can cause you to second-guess your trade plans.
Part of the reason successful traders make things look easy is because they’re so laser-focused. Through practice, they know what to look for and they trade with clear intentions.
Reduce the Noise
This goes hand in hand with limiting your distractions.
Here are more ideas on how to reduce the noise that can keep you from keeping your trading simple…
Chat Rooms
Imagine you’ve done your research and created a trading plan you feel confident in. While you wait for your entry, you open a chat room only to see several traders trashing your stock. You lose your confidence and decide not to enter your trade…
Only you soon find that it did exactly what you expected. But you missed your entry. This kind of thing happens every day. The thing is, even if the trade didn’t work, you won’t get better without planning and executing your own ideas.
Bottom line: Choose your chat rooms carefully. And be careful to not let anyone keep you from executing your well-crafted and researched plans.
Narrow Your Focus
Technology can help you trade … or it can be a HUGE distraction. But know this: the internet will still be there after your trade. Really. So stay focused while you’re in the game. Close any browser tabs that aren’t relevant to the action. That also applies to email and any non-trading applications.
In fact, if you use StocksToTrade, chances are you don’t need anything else. Ready to check out our trading platform? Get your StocksToTrade 14-day trial for just $7 now!
Write Down Your Trade Plans
Last but definitely not least, write down your trading plans.
I can’t harp on this enough. It seems so simple, right? Yes, but there’s something that happens in your brain when you put pen to paper (or fingers to keyboard).
All your hard work and research become more ‘official’ when you write out your trading plan.
Sure, you can still get distracted. But the first step in sticking to your trading plan is to write it down. After all, if you don’t remember it, it’s hard to stick to it.
And once you have your trading plans, keep them for future reference. Use them in your trading journal. Write down what happened with the trade. Did you win or lose? Did you miss the entry? Did you drop the stock altogether?
All that information can help you down the road. It seems so basic, but it’s another reason why good trading is simple. It’s also a smart way to go back and review what works for you in the markets and what doesn’t.
The Bottom Line
That wraps up my tips for keeping your trading simple. Remember, there’s always room for improvement. The key is to find your momentum. Once you’re moving in the right direction, things can get much easier.
Don’t make it harder than it needs to be. Remember K.I.S.S. Good trading is simple. Focus on building your knowledge. Then find what works for you.
Treat your trading journey like a business — take it seriously. Get rid of anything that keeps you from your goals and add things that bring you closer to them. See the pattern here?
As I said earlier, one way to speed up your learning curve is to find a good mentor. It can shave so much time off your learning process.
In StocksToTrade Pro, I use my experience to help you avoid a lot of mistakes that I’ve made learning the hard way through trial and error. You can learn from my wins and errors. You’ll also be around other traders like six-figure earner Mike “Huddie” Hudson and traders just like you working to be smarter, better traders. Ready to give it a shot? Join us today!
How do you keep your trading simple? Leave a comment!