“Time is money.” These are words to live by when you’re a trader. There’s only so much time in a day to get everything done, and if you don’t work efficiently, and spend your time wisely, you’ll fall behind, which usually means you won’t make enough profits to make a living. Becoming a top-notch trader takes dedication and hard work. There’s a lot to do, especially when you are a novice trader. It’s important to set realistic goals, manage your time and energy efficiently, and then work tirelessly to achieve your objectives with the limited time you have available. The efficient trader is careful to spend time wisely.
Some novice traders make the mistake of thinking that they can approach trading as if it were a regular 40-hour a week job: You put in 40 hours and you pick up a paycheck. Trading doesn’t work that way, however. It actually doesn’t matter how much time you put in. The bottom line is whether you make enough profitable trades to make a living.
You either can do it or you can’t; it’s merely a matter of skill and preparation. There isn’t always a precise one to one correspondence between the amount of time a trader puts in and the number of profits one makes. For instance, if it takes only 15 minutes for a skilled, seasoned trader to make enough profit to meet a year’s worth of living expenses, then so be it. Seasoned traders don’t have to spend 40 hours a week to make a living if they have the requisite skills. Novice traders, on the other hand, can put in 80 hours a week and see nothing for the effort. If you’re a novice trader, you can’t work under the assumption that everything you do will have a direct payoff.
You must also consider the total number of hours you can work is limited. You must spend your available time efficiently. Many novices try to do too much of the wrong thing. For example, they may waste precious time and energy reading about the markets and world events that have no direct bearing on the intra-day or intra-week prices of the stocks they plan on trading. Similarly, sifting through stock charts that have no bearing on the stocks one trades is also wasted time. You can’t be overloaded by information.
You need to maintain focus and efficiency. Trade a few key stocks, and know everything you can know about those key stocks. Become an amateur specialist. Memorize the chart patterns, how the prices change during the day, and the factors that coincide with the price changes. Knowing about stocks you don’t plan to trade or about broader economic events that don’t influence your key stocks will use up time that, realistically, you just don’t have.
Trading is a challenging profession, and you need to focus your psychological energy on what matters most. You can’t waste your time on distracting information, or activities that don’t eventually produce a direct payoff. Don’t be sidetracked by learning additional trading strategies that you will never use, or new indicators that are redundant with basic indicators of trend. And don’t believe you must keep up with all the media hype. Focus, work efficiently, and in time you will build the skills you need to become a consistently profitable trader.