Hello and Welcome,

It's Mike N. from 500Signals.com, a financial trading systems design architect since year 2008.

Every time, a client wants us to design a trading system for MetaStock or NinjaTrader - the brief will always include the the tasks they wish to see (semi)/automated. However, the strategies majorly remain the same - some, as written by authors going as far back as the 1920s.

In essence, there is a ton of regurgitated content out there on trading the stock market - only the branding and packaging changes.

With all the available content out there, how come only a tiny fraction of traders and investors are truly successful?

If you haven't learnt about trading psychology, risk and trade management, portfolio management, technical analysis, support and resistance. I'll share with you some resources gratis in a moment.

Let me ask again?

Despite all the foundational material on trading, how come only a tiny fraction are truly successful?

Here is your answer, and it's a simple one:

A. Capital

B. Profit

C. You

A. Capital - Trader Y has invested $2,000 in a trade, while Trader X has invested only $500.

If the trade makes a profit of 50%, then Trader Y well have a profit of $1,000 while Trader X will take home $250. See, the same trading decision, the same emotional investment but varied incomes.

If a the trade results in a loss of 50%, then trader Y will remain with $1,000 that they may use to trade again, while trader X will only remain with $250 which might not be sufficient to enter some other trades.

B. Profit

C. You

A. Capital

B. Profit - Every trader wants to make an income, a profit so to say. But how much income is sufficient income. A grandma on retirement can make $5,000 (just a random figure above the average US monthly wage) and find it to be a decent income. When the same amount is made by a middle aged man with a family with kids in college and other needs, it might seem like some meagre earnings for a household income. If each individual writes a testimonial of their experience in the markets the tone will be varied.

C. You

A. Capital

B. Profit

C. You - The other part of the puzzle is YOU (the trader or investor). The 'why' we do what we do is specific to each individual. Every individual has their respective life configuration. Even twins are motivated by different things despite sharing a womb, a home and the outcome of their lives maybe worlds apart.

A person's level of desire to succeed, the discipline to put in the work so as to improve themselves plays a great role in determining their success as a trader.

The Ultimate Stock Trading Guide

When you wish to improve your trading experience, always ask yourself, what area is your trading lacking? How can you improve.

Capital - Understand the foundations of trading the markets, the risk involved and see how you can raise capital. If you have small savings, you may always re-invest your profits to grow your capital significantly.

Profit - When a decent trading capital is achieved, it's time to pay yourself with part profit and diversify your other profits into other assets that can earn you a passive income. Improve your trading systems to help you milk the most profit from the market.

You - Self improvement should be continuous; trading discipline, trading psychology, money management and just showing up are key for success.

Mike N is a financial trading systems design expert. 

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