In any field, whether it’s business, athletics or the arts, the person that masters his or her particular craft is usually looked upon as the best, or at least one of the best at what they do. Thereby, specialization is key for trading success as I will go on to show.

A common thread among these high achievers is that they find their niche and continue to work to better themselves throughout their careers. From an early age, they have a good grasp of what talents they possess, and begin harnessing those strengths before most others are trying to figure out their lot in life. Moreover, those that don’t have exceptional talents simply work harder than their peers to attain exceptional feats.

Another aspect of this success is the highly specialized nature of what they do. In the medical field, for example, it’s not the general practitioner that earns the biggest salary, but rather the oncologist or heart surgeon. In team athletics, the most valuable players are the ones that can perform very specific tasks, such as closing out the game after the starting pitcher begins to falter or simply runs out of gas. We call this person the closer, similar to the salesperson who has the cunning to get a customer to sign on the bottom line where others have failed. In football, the so-called skilled positions garner the multimillion dollar contracts, while the others settle for just hundreds of thousands.

In the world of trading financial markets, this especially holds true: Specialization is Key for Trading Success. I see too many new traders continuously searching for the Holy Grail in different technical indicators, asset classes and strategies, which is fine when one is starting out. However, there comes a time when one must declare a major.

One of the hallmarks of successful traders is that they have a specialty. These folks have either a specific strategy or set of strategies that they have mastered and apply over and over again.

There are two schools of thought on this: One is mastering a technique and scanning the entire universe of asset classes for these specific setups; the other is focusing on a specific sector, asset class or market.

I primarily trade the Futures market because it fits my personality and provides enough opportunities for me and my family. There are other instructors at Online Trading Academy that have different specialties, such as Forex and options.

In the hedge fund world, there are managers that specialize in short selling – they search for overvalued companies and then accumulate large short positions expecting the market will ultimately reflect the true value (much lower) of the company or stock. On the flip side, value managers wait for stocks to get knocked down enough to create a large discount to the company’s intrinsic value before they purchase them. And then there are the technical traders that make buy and sell decisions based solely on the price action of the particular instrument they trade.

When I’m instructing and, specifically, sharing some of my strategies with students, a remark I seem to always get is how simple the techniques are. Some students think they’re too simplistic and don’t believe that it can be that easy. Let me make it very clear though, the strategies may be simple, but it is not easy to make money trading. This, it’s too simple perception can be a problem because these students will find it hard to find a niche. They will always be under the illusion that trading has to be complicated and, therefore, trading success will be elusive. I believe this to be one of the major impediments in traders; inability to stick to a simple strategy and master it. Another barrier is changing their old belief systems, but that’s a whole different challenge.

Case in point: I had a conversation with a student that has been doing well with his trading recently, but is hitting a road block. He is a bit perplexed by recent market action and is puzzled about why the market dropped so much in spite of a great economy. Prior to the selloff, he had become extremely reticent in shorting the market, this in spite of some technical patterns suggesting the contrary. I proposed that he stick to his strategies and continue to hone his skills as an E-mini futures trader. Furthermore, I admonished him to let go of the distractions such as the media, or whatever else was pulling him away from maintaining an objective point of view and executing his strategy. From our last correspondence, he seems to be doing much better.

I encourage everyone to find a niche in the markets and pursue a simple set of rules to achieve the goals that make you feel successful. We know those are different for everybody. Lastly, when I was very young, my grandfather said to me, ‘Find something you love doing, do it better than most and you will never go hungry.’

Learn to Trade Now


This content is intended to provide educational information only. This information should not be construed as individual or customized legal, tax, financial or investment services. As each individual's situation is unique, a qualified professional should be consulted before making legal, tax, financial and investment decisions. The educational information provided in this article does not comprise any course or a part of any course that may be used as an educational credit for any certification purpose and will not prepare any User to be accredited for any licenses in any industry and will not prepare any User to get a job. Reproduced by permission from OTAcademy.com click here for Terms of Use: https://www.otacademy.com/about/terms

Editors’ Picks

EUR/USD retreats toward 1.0850 despite weak US employment data

EUR/USD retreats toward 1.0850 despite weak US employment data

EUR/USD loses its traction and declines toward 1.0850 after testing 1.0900 earlier in the session. Because Nonfarm Payrolls data for October missed the market expectation by a wide margin due to hurricanes and strikes, the US Dollar manages to hold its ground.

EUR/USD News
GBP/USD climbs above 1.2950, looks to end week little changed

GBP/USD climbs above 1.2950, looks to end week little changed

GBP/USD benefits from the improving risk mood and trades in positive territory above 1.2950 in the American session on Friday as markets ignore the weak labor market data from the US. The pair remains on track to end the week flat.

GBP/USD News
Japanese Yen loses ground despite less dovish BoJ, US Nonfarm Payrolls awaited

Japanese Yen loses ground despite less dovish BoJ, US Nonfarm Payrolls awaited

The Japanese Yen depreciated following the release of Manufacturing PMI on Friday. The headline Jibun Bank Japan Manufacturing PMI registered at 49.2 in October, reflecting a decrease from 49.7 in September. US Nonfarm Payrolls are expected to increase by 113,000 jobs in October, a decline from the previous count of 254,000.

USD/JPY News

Editors’ Picks

EUR/USD retreats toward 1.0850 despite weak US employment data

EUR/USD retreats toward 1.0850 despite weak US employment data

EUR/USD loses its traction and declines toward 1.0850 after testing 1.0900 earlier in the session. Because Nonfarm Payrolls data for October missed the market expectation by a wide margin due to hurricanes and strikes, the US Dollar manages to hold its ground.

EUR/USD News
GBP/USD climbs above 1.2950, looks to end week little changed

GBP/USD climbs above 1.2950, looks to end week little changed

GBP/USD benefits from the improving risk mood and trades in positive territory above 1.2950 in the American session on Friday as markets ignore the weak labor market data from the US. The pair remains on track to end the week flat.

GBP/USD News
Gold clings to small gains near $2,750 after US data

Gold clings to small gains near $2,750 after US data

Gold clings to marginal recovery gains and trades slightly above $2,750. The 10-year US Treasury bond yield struggles to push higher after the dismal October jobs report and weaker-than-expected PMI data from the US, helping XAU/USD keep it footing.

Gold News
Bitcoin Weekly Forecast: Run toward fresh all-time high hinges on US presidential election results

Bitcoin Weekly Forecast: Run toward fresh all-time high hinges on US presidential election results

Bitcoin could experience a price pullback in the next few days ahead of the US presidential election, analysts say, an event that will be key to determining whether and how the crypto class will be regulated in the years to come.

Read more
Bank of Japan holds rates steady amid signs of modest GDP growth

Bank of Japan holds rates steady amid signs of modest GDP growth

Monthly industrial production results have been mixed but generally indicate a modest recovery in third-quarter GDP. Clear guidance from the Bank of Japan remains elusive, with each upcoming meeting being pivotal.

Read more

RECOMMENDED LESSONS

7 Ways to Avoid Forex Scams

The forex industry is recently seeing more and more scams. Here are 7 ways to avoid losing your money in such scams: Forex scams are becoming frequent. Michael Greenberg reports on luxurious expenses, including a submarine bought from the money taken from forex traders. Here’s another report of a forex fraud. So, how can we avoid falling in such forex scams?

What Are the 10 Fatal Mistakes Traders Make

Trading is exciting. Trading is hard. Trading is extremely hard. Some say that it takes more than 10,000 hours to master. Others believe that trading is the way to quick riches. They might be both wrong. What is important to know that no matter how experienced you are, mistakes will be part of the trading process.

Best Forex Brokers with Low Spreads

Best Forex Brokers with Low Spreads

VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.

Read More

Strategy

Money Management

Psychology