80% of Good Trading Comes Down To This One Thing

It doesn’t matter how many times we say it.

But most people just do not get this…

Good trading has little or nothing to do with the “perfect” trading system, or a great trade setup, or the next market that is going to skyrocket by 500%.

Don’t get me wrong…

A good trading method is important – and so is your psychology, which is just as essential.

But in reality 80% of good trading comes down to just ONE thing…

If you have ever watched a cat (or a tiger), you will see that it does not just pounce on its prey. You don’t see a cat spotting a bird and immediately jumping to catching it.

What usually happens is that the cat spends a long time observing its prey and then preparing itself for catching it. Only then does it pounce on the bird!

In trading, we call this positioning.

Positioning requires 3 things:

Discipline, good timing and patience. ​​

Most traders seem to lack all three: they have NO patience or discipline to WAIT for the right time to enter a market.

I sometimes get emails from beginner traders saying: “Why are we WAITING to enter this market? Why don’t we just go long (or short) this market now?”.

The answer is very simple:

Think of yourself as an army general. You have control and responsibility over your soldiers, and you want to win the next battle.

Do you commit your soldiers to battle without careful planning, good timing and preparation? If you do, you will lose most of your soldiers and lose that war.

The same is true in trading. Do you commit your hard-earned money (your soldiers) to a trade (the battle) without careful planning or positioning?

If you do, you may get lucky every now and then and make some money. But in the long run, such lack of discipline and reliance on “luck” is a recipe for disaster.

Remember: NO SETUP – NO TRADE!

As the writer Brett Steenbarger says in his book The Psychology of Trading, most traders will try and find something to do out of boredom. They have to feel they are doing something!

Before you enter your next trade, ask yourself how much time have you given to careful positioning on a trade. Ideally write down your plan on a piece of paper. If you cannot put the plan into words, then draw it on a chart.

But remember: having a plan is one thing. Having the discipline and patience to carry out that plan is another!

Make sure you have all three.

​​​​​​​Hope it helps and good trading!

Alessio Rastani is a stock market trader at www.leadingtrader.com

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