Finding Your Niche | Articles-General

I am a brand new subscriber to your website. I watched your 12 essential elements for trading success and have also downloaded the checklist for trading document. Thanks so much... both the video and the checklist have been very useful. I have completed the checklist and have a few questions:

1) Referring to points 13, 18, 24, and 31 . I am trying to make a trading plan to incorporate the things that you have mentioned. But I find this task daunting. I don't know...what kind of trader I want to be, momentum, swing, position. I get confused with trading strategies, setups, techniques...ie what they mean. Can you pls give a clearer picture on some of the above points when you get a chance. Appreciate your time and help.

2) Also another important bottleneck for me is Time Management. In the time I can devote to trading and trading education......I do not know what should be of priority ....what are the first things I should master and learn. I think the trading plan is the most important but what should I handle first? how should I proceed step by step?

Thanks again for all the great work and appreciate a response.

Reply:

Hi CC,

Thanks very much for the positive feedback on my website, articles and videos. I'm glad you've found it useful so far. I hope to continue to provide valuable content in coming months & years.

Your questions are excellent (I might have to share this through the newsletter!!). Unfortunately though, I expect that no matter how much effort I put into answering them, you'll be disappointed with the outcome.

Why is that?

Firstly, the traders checklist is very much an overview of the process of becoming a trader. Consider it like the 'contents' page of a 'How to Trade' course. And the areas in which you're facing a challenge are perhaps some of the largest modules within that course. I cannot do the topics sufficient justice within an email. And while my website is still in its infancy, and lacking a lot of the structure and detail that I aim for it to have one day, I think the best option for me here is to go over some very general concepts and definitions and try to point you to some other areas for conducting your own further research.

I understand your concerns about the challenge you're facing. The process is certainly daunting, as you have suggested. The process of becoming a trader is not as simple as ticking off the items on the checklist over a week or two, and then sacking your boss and retiring to the Caribbean. Although, I think you're aware of this. The process of working through this checklist will likely take several years for the average person. In fact, most will never get through it, giving up in frustration well before achieving success.

Secondly, it would do you a great disservice if I tried to recommend an appropriate market, strategy or timeframe. Although much of my content relates to the way I trade, and perhaps in future I will be forced to narrow the focus of my website to this sub-niche of trading, at the moment I'm trying to keep a lot of the concepts very general and applicable to all markets, timeframes and strategies.

To suggest you should trade forex or emini futures, or to suggest short timeframe daytrading, would be pure ignorance on my part. We really are all suited to different market conditions. As frustrating as that is for a newcomer, it's a fact. You have to find your own path. To try to follow mine won't necessarily work for you. Where to start though. I'll recommend a resource in a short while. However, all you can do is to pick something that seems to provide the best fit to your lifestyle, your psychology and your risk profile, and then just trial it for a while. This is one reason why it often takes years to master the trading game. You just don't necessarily know where you're most comfortable until you try a lot of different options. I started on stocks (weekly charts, then daily charts), then moved to options on stocks, and from there to CFD's on the daily timeframe, then forex, gradually reducing timeframe. Now I'm really enjoying daytrading on the emini futures. It's a process of evolution and self-discovery.

Where to start though? Yes, you need a trading plan, but it doesn't have to be comprehensive just yet. Even if all it contains in sections is the heading then that's a great start. Under each of the headings, list a series of questions that you need to answer, and then conduct research. Your trading plan will build as your level of education increases. So basically, you're using the trading plan as a study guide.

First priority though for you, I think, is to read 'Trade Your Way to Financial Freedom' by Van K. Tharp. The book is very common, so if you can't afford it you may be able to find it through a local library or University library.

That book is the first thing I thought of as soon as I read your email. It seems to be written to deal with exactly these questions, taking you on a journey of self-discovery, selecting a trading strategy and timeframe that is a probable 'best fit' for your needs. Of course, your plan will be a working document, and continue to change in future.

Sorry if it seems I'm just passing the buck here, but until I get a complete 'How to Trade' course prepared, I really believe this particular book will provide a much more comprehensive answer than I can via email.

In the meantime though, while waiting for the book to arrive, work through the free education at www.babypips.com. Click on the 'School' tab and work through each of the pages on the LHS menu. It's forex focused, but just gloss over those parts if you're not interested in that market. Their school is excellent - and will provide a very beginner's introduction to all the concepts you mentioned in your email, as well as provide a sample trading strategy. It's very basic, but is maybe something to use as a starting point if you have no other ideas. Then grow from there as your knowledge and experience increases, and the sections in your trading plan get filled out.

Hopefully that helps get you started. Let me know how you go with babypips, and the book, and if you need a hand with further steps beyond there.

Enjoy the process, it's worth it!

Cheers,

Lance Beggs

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