Trading formulas come in a myriad of sizes and shapes, but I have crafted this formula to be all encompassing, and it seems to suffice nicely. I’ll give you the equation, and then we can discuss it:
(Trading Knowledge X Practice) + Persistence + Consistency = Success
My hobby (my passion) is playing chess, and I had the privilege of playing postal chess (sending chess moves through the mail) with the United States Champion, Sammy Reshevsky. While I never came close to winning a game, I did glean insights into his success. For one, I observed that he took the knowledge that he had acquired and practiced over and over and over. He would review his games, and if he made a rare mistake, he would identify the issue, make adjustments, and then return to the chess board. For the trader it’s the same, and hence the first part of the formula is to constantly sharpen your knowledge by multiplying it with much practice. Knowledge is most important, and practice is the key to using that knowledge correctly.
Now we take your trading knowledge, which you are multiplying by practice, and add to this the next part of the formula: persistence. Persistence is the cornerstone of your trading competitive drive, it is your motivation for doing what you are doing, and for having the unshakeable vision that you will be doing this for the rest of your trading life. It’s your assurance that this training will sustain you, and it is your preparation to meet trading opportunities favorably. Also, it’s not allowing yesterday’s trading loss to break your concentration or your mental processing, or to make you think that you must jump back into the market quickly (even without a proper setup) just because you foolishly have the notion that you must get your money back instantly. Instead, persistence molds behavior, and gives the boldness to continue learning the markets and to learn them correctly.
Consistency, the third component of the formula, a byproduct of knowledge and persistence, encourages the trader with trading performance, builds strengths, completes the equation, and yields a sum total of trading success.
So focus on this formula, use it for introspection of your own personal progress, and you should learn to build a career that will be gratifying and profitably rewarding for your trading lifetime to come.