From 3 Years of Break-even to Consistent Profits
I have been completely fascinated with the Stock Market ever since that very first trade some years ago. I loved how you could invest an amount of money one day and watch it go up in value the next. My first trade was a stock and that friend had “tipped”. I knew nothing about trading and was willing to take the risk and invest into this company. Besides, my friend knew far more than I did about the markets. I probably didn’t even know what the company did. I’ve never cared much for fundamentals. I’m just interested in whether I’m buying into something that’s going up.
I don’t remember the exact outcome of that particular trade although it probably went something like this: I bought in, stock price continued to rise for a few days, it hesitated, dropped a slight bit, I got scared and cashed out for a really small profit. Over the next few weeks and months the stock continued to rise while I watched and kicked myself for all the money “I could’ve made”. Probably a fairly typical rookie trade.
Over the next 3 years or so I made more trades similar to this one. Losing a bit and winning a bit. I managed to get into some great trending stocks which made some quite nice returns too. But these were still “recommendations”. I wanted my own methods, I wanted to know how to trade for myself, not just trading off the back of someone else’s ideas.
I was also doing a huge amount of reading. Trading books of course. They say you can tell what someone’s passion is by what books they’re reading in their free time. I wanted to know as much as I could about the markets in my journey to become consistently profitable. I got into a few books by a particular author who clearly had his own profitable way of trading. I tried replicating this for months, even years. But I couldn’t make any money. It wasn’t working.
Unfortunately although I had learnt some very valuable lessons of risk management and trading psychology from this author, because his books were among the first books I had read, I thought his methods of trading were the only profitable ones. Until I had mastered how he traded, then I wasn’t going to make money. And I was struggling.
His methods used technical analysis; using price charts to make entry and exit decisions. But they weren’t 100% rule based. He used discretion. This is where I got knocked down. I had no where near enough trading experience to be using my own discretion and expect to make money. He was good, really good.
I took some time out. It’s something I recommend any trader do from time to time especially during times of struggle. During this time out I decided to request the help form a professional trader and coach. After meeting, he agreed to work with me and so I hired him. To this day, I still say it was the best move I made in my trading career.
My coach very quickly introduced me to system or rule-based trading. So, similar to what I had been doing, using charts and technical analysis but this time with rigid rules in place. Rules for entries, stop losses, and profit taking exits, along with money management techniques. This really was a “light bulb” type moment. He showed me a set of rules, what markets to trade and all I had to do was trade them.
There’s many other factors involved with successful trading but it kind of is that simple when using systems.
I very quickly had a belief shift that now after years of struggling, I really could make money like the professionals. It’s been onwards and upwards ever since. In the years that followed I have been developing and modifying different trading systems constantly looking to improve my results and meet my sometimes changing objectives.
For anyone struggling to make money, if you’re not following a rule-based system then I suggest you take a look at some. I believe it’s a great way of trading to gain consistent profits which I hope you’re all out to obtain.
If you’d like to ask me any specific questions or share some of your own experiences then please leave a comment down below or email me at jarrod@thetransparenttrader.com
Thanks for reading,
Jarrod