There are no shortcuts to trading success. Enjoy the Journey!

A new trader said something that set off all my alert sirens in a recent conversation I had with my trading group. They asked about how to make money on "parabolic trades". After further inquiry it was determined that what they were referring to was actually more of a 'morning pop' type of trade and not a full parabolic move. This concerned me for several reasons. 

1. If you don't know the difference between a parabolic move and a 'morning pop' play, you are not experienced enough to be trading them. 
2. In this case the trader had already lost some money and was trying to make it back quickly so as not to cause relationship problems. Trading with a strong fear of loss is NEVER a good place to start. 
3. If you are going to be in a quick trade like the pops off of the open, it is VITAL that you understand the context you are trading in, in relationship to the market and the overall stock trends.
   
4. You can make your woes much worse trying to copy someone else's trade with no awareness of what the chart is telling you.
   

​Let's unpack that more...

What new traders do not realize at their peril is how many things a successful trader needs to consider in order to execute a successful trade. Far too many for me to go into detail here but just some surface level considerations are:

• Overall market bias and trends
• Overall long term stock trends (monthly, daily, weekly)
• Lower and Higher Time frame trends (60', 15', 5', 3', 1' etc.)
• Volume and Spread considerations

These only scratch the surface of a myriad of considerations.

With this said, even with an awareness of the previously mentioned criteria and much much more, most seasoned traders stay away from aggressive morning pops because they know that the risk is often too high for the reward especially when taking a substantial share size. So if seasoned traders aren't doing it noobs shouldn't be anywhere near these types of plays. 

It is NEVER a good idea to trade with money that you are not willing to lose. First, because no trader has a 100% success rate on all trades there are too many variables to make that possible. Second, if your mindset is in a risk avoidant and panicky state most traders will start to take unreasonable risks and will make mistakes because they are not thinking clearly. This will cost them money, dig the hole deeper, and cause the types of nightmare scenarios that it is a trader's job to avoid. Going in with the wrong mindset is probably one of the worst things any trader can do. 

I have heard of stories in the world of gaming where people have paid over a million dollars for a developed character. One that already has all of the cool gear and XP. Traders seem to think they can do something similar by copying trades they see called on Stocktwits or other such sites. But unless you know what you are doing you cannot get in and out of a trade fast enough and at the same price point. So unless you understand what is happening you will not get the same results. You have to earn experience. You have to be able to take in all the information. For people who drive you know the difference between when you had to think about every part of the driving process. All the things you take for granted now that you speed down the highway eating lunch and answering messages with you Car Play or whatever it is that you're doing. As we get more experience we can take in greater amounts of information with quicker speeds. I am not yet to the level that my mentors are, but I can see more now than I did when I started.

Trust as a newer trader that you are not seeing all that you need to see yet. It is during this time of being new that it is better to look for patterns that already have a history of success. (If you want to learn technical patterns take a course from a reputable company and they can teach you what to look for). 

So, although we all want to get to success as quickly as we can, there are no short cuts. It takes time to learn how to spot good patterns and manage them well. Take the time to learn. Trading is definitely more fun that way! Enjoy the journey!

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