As I said before I spent almost two years studying technical analysis and how to behave in a trading environment. In that period, I came across many times with two key ideas, money management and trading psychology behaviour.
I read some articles about money management and I understood its importance quickly. Every trader use it and every good system must have it. Why? Because in trading, especially in a learning process we can do much harm to our money. Money management is like our safety belt, we don’t drive to crash but it’s a possibility when we get in the car.
While I was studying I used a paper trade account and I achieved decent returns. I was admired how good I was and how I was making quick and easy money, but I tried to stay humble and I always remembered myself that it was only a paper trading account.
Every trader I read are always reminding how difficult is to succeed in the business, how hard is to have a system that gives you an edge and how you must keep a balance between winning and losing. You should not be to confident about your winning trades or completely devastated about losing money.
I read a lot about this in forums. Although I tried to stay humble, sometimes I thought to myself how can this douchebag make any money if he has an enormous ego and he never changes his opinion. If he can I certainly will do better than he does. But can people with big egos and zero tolerance to change their opinions do good in the markets? Of course it is possibly, but they will be a very small minority for sure and in the internet world we can say and we can be whatever we want.
Comparatively to others I seemed more focused, more eager to learn and most importantly more humble and I thought that this was a good mental setup to start trading. The plain truth is that you need to stay focus, be eager to learn and be humble if you want to succeed in the markets.