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  • Writer's pictureAlpesh Patel

From Novice to Pro: Trading Lessons from the Elite of the Financial World

Updated: Nov 15, 2023

The power of access to the best is life changing: I was fortunate to have met and interviewed the world's leading traders when I first started by journey.

This is what David Kyte taught me. visit www.trading-champions.com

The key trading lessons mentioned include:

Speed of mind and the ability to change your mind quickly are crucial for successful trading. This involves swiftly shifting from buying to selling and vice versa

It's important to push things when you get it right and continue to ride a trade that's going at full steam. However, knowing when to get off is equally important

Managing losses is more important than managing profits. The saying "cut your losses and run your profits" is emphasised.

Being a good trader is considered an innate skill that can't be taught, but experience is invaluable.

The ability to switch off and not dwell on past trades is essential for maintaining a clear mind for future trades.

1. Speed of Mind and Flexibility

In the fast-paced world of trading, the ability to think quickly and adapt is paramount. Markets are volatile and can change direction in an instant. A trader's success often hinges on their ability to swiftly change their position from buying to selling and vice versa.

This agility of mind allows traders to capitalise on fleeting opportunities and minimise losses. The concept is akin to the OODA loop (Observe, Orient, Decide, Act) used in military strategy, which emphasises rapid decision-making and execution.

2. Knowing When to Push and When to Pull

The adage "let your winners run and cut your losers short" is a cornerstone of trading wisdom. When a trade is going well, it's important to maximise the opportunity by pushing things. This could mean increasing your position size or using other strategies to amplify gains.

However, knowing when to exit is equally crucial. Overstaying in a profitable trade can quickly turn gains into losses. The key is to have a well-defined exit strategy, often aided by tools like trailing stop-loss orders.

3. Managing Losses Over Profits

While it's natural to focus on profits, effective loss management is often what separates successful traders from the rest. The principle of "cut your losses and run your profits" is a risk management strategy that emphasises the importance of exiting losing trades quickly to preserve capital. This is often facilitated by setting stop-loss orders at predetermined levels, allowing traders to limit potential losses automatically.

4. Innate Skill Augmented by Experience

While some argue that good traders are born, not made, there's no denying the value of experience. Trading is a skill that combines innate qualities like discipline, emotional control, and quick thinking with learned strategies and market understanding.

5. The Importance of Emotional Detachment

Emotional detachment allows traders to approach each new trading day with a fresh perspective, unburdened by the outcomes of previous trades. Alpesh Patel OBE


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