Short instructional video by Adrian Reid (Enlightened Stock Trading) outlining five practical steps to achieve trading success: (1) learn the language of trading to engage with mentors and resources; (2) understand your own psychology, objectives, and lifestyle to choose a fitting trading method; (3) develop and backtest a rules-based trading system to ensure profitability; (4) understand and manage risk on individual trades and across the portfolio; (5) write a written trading plan to remove emotional decision-making during market events.
Chapters
Have you ever wondered how some traders manage to move through that initial learning phase and go on to have the huge levels of financial success that everyone so desperately wants out of the stock market or any investing? My name is Adrian Reid and I'm from Enlightened Stock Trading. What I'd like to do is share with you the five simple steps that I've discovered and I've shared with my clients to help you move through the learning phase and come out the other side profitable and consistent with your trading and investing decisions. So the first step. The first step is to learn the language. In order to have a conversation with a mentor or a coach, or indeed to teach yourself, you need to understand the basic language of trading and investing. Now, that doesn't mean reading countless books. It just means understanding the core concepts so that you can have a deep, meaningful conversation with your teachers and mentors. The second step is is to understand your own psychology and yourself as a trader. By understanding your psychology, your ideal lifestyle, your objectives, and your personality, you can choose a trading method or a trading strategy that fits you. And if your trading strategy fits your personality, it becomes easy to follow it consistently. And following a strategy consistently is how you make huge money in the stock market. The third step is to develop and test a set of rules that are actually profitable. So many traders I've come across out there when I'm teaching and talking with other traders have a set of rules that they don't even, haven't even tested, so they don't know that they're profitable. And in fact, most published rules in books and so on just don't even work. Or they used to work, but they don't anymore. So by developing your own system and testing those rules and you can be sure that you're going to be profitable. The fourth step is to understand and manage the risk on individual trades or investments and across your entire portfolio. Because even the best system in the world will send you bankrupt if you don't have good risk management and you don't manage your portfolio properly. And the fifth and final step is to write your trading plan. I'm constantly astounded by how many traders don't have a written trading plan. When you don't have a trading plan, if something unexpected happens in the market, you've got to scramble and figure out what you've got to do. But when that happens, your emotion goes up, your intelligence drops, and you end up making bad financial decisions and losing money. If you have a written trading plan guiding everything that you do in the markets, then when something happens, you'll know exactly what it is that you're going to do, and you can make the right decision so that you can make money or at least not lose too much money if something bad is going on in the market. I hope that's been helpful. My name's Adrian Reed from Enlightened Stock Trading. See you in the next video.
