The Eight Things Needed To Become An EliteTrader

Do you know that…

Every year, millions of traders put their skills to the test in the financial markets, yet the vast majority will lose their money and walk away with their tails between their legs. A chosen few defy the odds, churning out profit after profit over extended periods of time, accumulating the riches, security, and well-being that others can only fantasize about. So, what distinguishes these elite traders from the rest of the pack, and how can you join this exclusive club?

To answer the above-mentioned question, we have to start with what isn’t necessary to become an elite trader. Although many elite traders follow this path, you don’t need to take specific courses or relocate to Manhattan and work on Wall Street for a decade or two. You also don’t need a large investment to begin your trip because you already have the instruments for building money slowly and steadily. Finally, you don’t have to work in a prop shop setting, where you can commiserate with other like-minded people every morning.

But the question that still poses itself is…

What Does It Take to Become An Elite Trader and Stand Out From The Crowd?

Treat Trading as a Business

To begin with, think about trading as a business rather than a pastime or a slot machine. Because most people have deep-seated financial problems that manifest during risk-taking, this requires effort. Overcome these challenges by creating a business strategy that includes a budget for necessary tools, like real-time news and charts, as well as a list of the markets, instruments, and methods you’ll be trading. Finish your strategy with a reasonable forecast of monthly and annual profit goals. Treating your trading journey as a business will put you on the right road to being an elitetrader.

Record Keeping and Taxes

Keep accurate, organized, and up-to-date records for your trading business, just like you would for any other business. An elitetrader is usually well-organized, not just in terms of paperwork and tactics, but also in terms of their thoughts. It’s a good idea to have both digital and print copies of important trading documents, such as:  

Trading Plan:

A summary of the trading strategy

The plan’s programming (if applicable)

Contributions (for example, the length of the moving average)

Previous iterations of the plan

Brokerage Statements:

Organized by broker

Should be reconciled monthly (mistakes do happen)

Trading Journal:

Record your trading journey

Resources:

List of important phone numbers

Economic calendar

List of market holidays

Rollover dates

The troubleshooting list

Keep a digital copy in one folder on your computer and a paper copy in a separate “trade binder” with dividers for each area.

Document Everything

Beyond the essential documentation, staying organized in general may help you be a more productive business owner and elitetrader. Your workplace and trading desk, for example, should be well-organized, clutter-free, and well-stocked with essential office materials. Calculators, paper and pencil, your trade log, and a list of crucial figures should all be within easy reach at all times.

As an elitetrader, it’s also beneficial to have a system for undertaking research and development for your trading strategies. Much of this comes down to having a well-thought-out research strategy so that you don’t waste time duplicating work you’ve already completed. For example, having a systematic technique of naming the many versions of your trading strategy can make it a lot easier to discover what you’re searching for. For example, if your field of expertise is copy trading, it would be important to write down the trade copier you are using as well as the advanced settings you are using with that trade copier. 

Be Specialized in One Thing

Choose certain markets and strategies that suit your temperament and knowledge set as early as possible in your trading career. You’ll need to identify and master many trading edges, which let you produce favorable outcomes for certain strategies across dozens of positions at will. One thing that all effective elitetraders have in common is that they make an attempt to control risk before pursuing reward. You’ll be well on your way to being an elitetrader if you master that one idea.

Track Your Taxes

Unless your trading activity reaches a specific level and you gain “trader tax status,” the IRS expects you to obey the same tax requirements as investors. For tax reasons, elitetraders can decide to mark-to-market (MTM), which allows them to deduct some trading-related expenditures such as platform fees and education.

Not everyone is eligible for MTM status, and not everyone would desire it. If you choose this option, all of your work must be counted as closed at the end of the year, regardless of whether they were really closed.

While securities elitetraders may gain by making the MTM election, futures and commodities trading, who normally have more favorable tax treatment without the election, may suffer as a result. It may be difficult to reverse the MTM option; if you are considering making the choice, you should speak with an experienced CPA, tax specialist, or attorney who has dealt with trader tax concerns before making any decisions.

Choose Your Information Sources Wisely

It’s easy to get caught up in the media circus, watching a never-ending procession of pundits spout ideas that have no influence on your day-to-day operations. Instead, switch off the TV and subscribe to a real-time news service or forums like elitetrader.com that will provide you with the facts, free of bias or emotion. With a professionally controlled Twitter feed of no more than 75 carefully selected sources, you’ll be following the same news flow as Wall Street’s elite.

Find a Quality Mentor

Now comes the challenging part. You must learn from the greatest in order to become an elitetrader. That’s a tough assignment, given the abundance of self-proclaimed gurus peddling their wares in chat rooms and publications. Unfortunately, few of these people have the knowledge, expertise, or long-term track record you need to take your trading to the next level.

Rather than avoiding these people when looking for a mentor, try out as many different teachers, methods, approaches, and forums as elitetrader.com as possible to evaluate what works and what doesn’t. You’ll meet a few helpful teachers along the way who will provide you with a lifetime of trading expertise.

As an Elite trader, Take Care of Yourself

Depending on your existing lifestyle, your final duty may be the most difficult. Once you’ve decided to be an elitetrader and follow this elite road, you’ll need to keep an eye on your personal habits and connections. The mental abilities necessary to pull money out of the market each day are in danger by drug use, poor diet, and sleeplessness. When you add in marital strife or fights with parents, your money and discipline are more likely to be lost via your positions.

Recognize the link between how you feel and your financial performance. Financial markets are the worst place to deal with personal concerns, so clean up your act and quit smoking, go to the gym, and buy flowers for your spouse. You need to be at your best to trade at the top of your game since you have essential tasks to complete.

The elitetraders take the financial markets seriously, carefully weighing risk and potential profit. They hone their profession through meticulous documentation, carefully selected data sources, well-defined trading edges, and lasting relationships with mentors who will help them reach new heights.

We believe in you elitetrader.