THINGS PROP TRADERS NEED TO KNOW
If you’re a new prop trader, one thing you should stop doing is looking for the one golden formula to know in this industry. You might think that there is a quick way to find a winning formula, but it only leads to more confusion. New traders become overwhelmed and intimidated by these lists and many inexperienced traders get their trading psychology dented as they feel inadequate when they see such long lists of information telling them to follow their gospel. These kinds of list are off putting if you’re making trades with live funds (especially large amounts) where learning and consistency is key.
Price action is not as simple as you think. Master the basic analysis tools, they will serve you well when find trades and document your findings about how the market reacted to the trading tools you’ve used.
It is common for a new trader to try every indicator possible at first – even stacking them on top of each other. Eventually you will need to layout very simplistic charts to study and find trading setups on.
Candlestick analysis will be your bread and butter in your trading, but if candlesticks are too difficult for you then use other basic systems like support/resistance or supply/demand with a good understanding of trends and the way the market moves in cycles.
Risk and reward are an extremely important topic which we have cover in the past and offers concepts which often go hand in hand. The key is to make sure you stay on top of your system, as well as identifying any weak points, if necessary, by making improvements or not trading certain markets until you understand why they don’t work for you. This is a big point for traders and most traders will tell you they wish they knew this long before making too many mistakes in their trading. The idea is to constantly improve and not compound mistakes over many trades or many weeks.
New traders take the advice about capitalizing to accelerate success seriously – this means investing enough money into the market so that it will be profitable over time, trade mentors can really help newbies out with their knowledge and expertise, account margin calls or failed prop accounts has led many people to see how important a good mentor is – coaching industry seems like it’s picking up since then because more people realise just how beneficial having one could be!
Mentors make the difference in your success. Getting mentored by someone who has been doing what you want to do for 5 years can give you all that knowledge in just 1 year, because they teach and guide your development, giving feedback and introducing relevant ideas. Beginners may not know where to start when solo trading; with a mentor’s help, they avoid trial-and-error phases of figuring it out on their own while also avoiding costly mistakes! The best mentors are those who care about teaching students and forming them into profitable traders over time. Mentoring is an investment so take some time vetting before making any commitments on live trading capital.