Today I have decided to write an article about the steps leading to the successful algorithm trading, which means to successful trading through robots. Although more it will be a list of “characteristics” that a trader should have or should have been willing to cultivate.
7 steps to success in (algo) trading
Whatever business we do, we have to always approach it with precision. Do things well and do not try to post it away. Precise approach means that I do all things as I should do them. Don´t try to look for shortcuts and do things well so it can lead you to your goal.
If I am building trading robots, I have to do it with responsibly. That means not to want unrealistic results. Many traders would like hundreds of per cents per month, but this is not the way market works. If it happens, it’s often about coincidence. Better aim for tens of percent per year and think about how to raise your capital.
Every business has one thing in common – common sense works the best. Use common sense and think about what you are doing.
Critical point of view
This is very important to me. When I find a strategy, I am trying to see it from the critical point of view: “Why might this strategy fail in real terms?” If the reasons for the failure are negligible, then it belongs to the trading account.
If I am not doing well and something is wrong, I’m looking for mistakes. But human nature is to search for mistakes everywhere, just not in you. If you are not doing well, try first to ask yourself what you are doing wrong. Think about it carefully. Usually there is something wrong inside. Often, a single decent insight is enough to find out that you just forget about one thing that divides the successful ones from the losers.
Trading is about continuous education, about finding new approaches, new possibilities. Even after ten years in business, I did not stop learning. And probably
I will never stop :).
Optimize the risk
This point is absolutely crucial. Many traders fail because they cannot manage risks. Learn how to work with risks and how to risk in optimal way. When you have more strategies in the portfolio, you always need to have a balanced risk. And do not risk the whole account so you can maintain the situation mentally. Always pay attention to the safety of your capital and make sure you understand that profit is a function of the risk, not vice versa.
I myself had to change a lot to achieve success. I recommend you the same, Switch your thinking to success. Successful people have always worked hard and moved themselves forward. And one note at the end : W. Buffet is 85 years old and he is still learning. What about you? Do you work on yourself?