Trading Lessons Learned from Matt Choi CMT, Owner of Certus Trading

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A professional trader, educator and best-selling author, Matt Choi has been trading successfully for more than 17 years, using a self-taught approach and trading with his own money.  Under Certus Trading, Matt Choi offers a range of educational courses on how to trade stocks, ETFs, options, commodity and financial futures, and FOREX.

In his teaching, Choi often quotes Albert Einstein: “I am not a genius, I am just curious.  I ask many questions.  And when the answer is simple, then God is answering.”

Choi encourages traders to adhere to this same sort of philosophy when trading –  ask the right questions, look at everything from a 360 point of view and actively seek out answers to those questions before making an informed decision.

Successful trading is about managing risk and making the right decisions.  It’s also about taking a step back and asking yourself three important trading questions:

  • What is it that you do well?
  • What’s your plan?
  • Does the trade make sense?

As a trader you have to be able to identify your strengths.  Perhaps it means you excel at trading earnings, breakouts or weekly options.  Whatever the case, identify the type of trades that have proven to make you the most money.  Focus on those strengths and further honing your skills.

If you are new to trading, try experimenting and find what type of trades best fits your style. If you can’t clearly identify your edge, start off by trading small. This way you can explain why the trade opportunity looks good and give examples of similar trades that have worked in the past.

Next – ask yourself, what’s the plan? What is your decision making based off?  No matter what the circumstances, traders should always have a plan in mind before jumping on the next trade.  It’s best not to formulate a plan based off of whether you think a stock will go up or down or by blindly following the opinion of an analyst on TV.

If you allow your emotions to get involved in your decision making, you are at risk for taking a loss.

Lastly, ask yourself, does the trade make sense?  Some traders focus too closely on high priced stocks but forget to take account of the risk and volatility.  For example, some stocks have wild swings that are not suitable for all accounts and won’t make a dent in profitability.  Instead, look at the trades that have proven to have an edge for you and focus on your potential gains, and be more strategic with your decision making.

In an industry where keeping up with new trends and strategies is an important part of success, there is always an opportunity to add to one’s book of knowledge. Most successful traders will agree that formulating good habits played a big role in their longevity.  Let’s face it, if you blindly follow and copy other traders, you’re only holding yourself back.

Rather, you should try to figure out what works for you and what doesn’t. When you utilize your own strategy, you become more self-sufficient, constantly improving your trade style.

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