Most beginners focus on the wrong things.
Even knowing what I know now, there are some things that remain the same. The markets teach differently than books, lectures, or other people’s accounts. Some classes only last if they cost a lot of money. I don’t think that changes.
But here’s a version where I start from scratch, which will look very different than what I actually did. It’s not because there is a better system or a more sophisticated approach. Because the fundamental choices I made early on—what to focus on, how to measure progress, and what to prioritize—were compounded and wrong over time.
This is not a list of strategies. It’s a description of an approach, indeed a philosophy, to the early days of becoming a trader that I believe will produce meaningfully better results than the distributed, reactive, complexity-seeking approach from which most people, myself included, begin.
The first year is almost entirely about one thing.
If you had to start over, your first 12 months of active trading would be entirely dedicated to learning one setup. Not multiple. one.
My setup of choice is a trend-following pullback. Specifically, identify an asset that is in a clear uptrend on the daily chart, wait for a decline to a meaningful support area within that trend, enter when the price shows signs of buyers returning from that level, and exit at the next significant resistance or when the trend structure is broken.
This is not a novel idea. This is one of the oldest and most documented price actions in the market. Downtrends occur in stocks, futures, forex and cryptocurrencies. It has traded profitably for decades. No exotic indicators or complex analysis required.
What is needed is patience, discipline and an honest assessment of whether the three conditions actually exist before committing capital. These three things are what most traders are bad at, especially in the early stages of development. Doing nothing else for a year and practicing these three things in a single setting while rigorously documenting your results will eventually build the foundation on which everything else in your trading will be based.
The temptation to add more settings, more markets, more complexity will be strong. In the early stages of your real trading career, every experienced voice told you to diversify your approach and develop a more comprehensive toolkit that is not limited to one setting. The advice was well-intentioned and wrong. A comprehensive toolkit is provided after the basics. Not before.
The specific process I will follow
Before trading:
I will write my reason for participation in one clear sentence. It is not a summary of the analysis, but rather the core thesis. If you can’t write it in one sentence, your thesis isn’t clear enough to trade.
I identify the level of nullification before looking at the position size and place stops with hard orders. Stops are determined by the chart, not by how much I am willing to lose.
Calculates position size based on stop level. The maximum dollar risk per trade is a fixed percentage of your account and never exceeds 1%. If that calculation causes the position size to be too small to be practical when taking commission costs into account, the trade will be passed through.
I will note targets defined as the next important resistance or logical targets based on measured movements in the downtrend.
After your transaction closes, I will review it and answer your three questions within 24 hours. Did I follow the plan exactly, did the results teach me something I didn’t already know, and what would I do differently next time?
This process, applied to every transaction over a 12-month period, will give you a level of self-knowledge and process clarity that you didn’t have until later in the transaction. The records it generates will tell me whether the setups I have set actually have positive expectations, under what market conditions they perform best, and where my specific execution weaknesses are. That information is more valuable than any advanced technical concepts I might have learned instead.
During the second six months, risk management will be the entire focus.
Most trading education presents risk management as a constraint. The stop goes here. Position size is calculated this way: These not only limit your losses but also your profits.
A more accurate framing that I try to internalize from the beginning is that risk management is the whole game. It is not a component of it. all.
Here’s why: Markets are uncertain. There is no 100% win rate for any setting. Even a setup with a 60% win rate will result in a loss 40% of the time. If bad luck occurs with any trading approach, the account may experience significant losses. Whether a trader survives a downturn and continues trading is almost entirely determined by how aggressive his risk management remains during the loss period.
Traders who survive the downturn continue trading and benefit from mean reversion in win rates that eventually return to their long-term average. Traders whose accounts are severely depleted during a loss period are unable to continue trading, initiate desperate trades that further exacerbate the damage, or exit the market at exactly the wrong moment.
During the second six months of the virtual restart, I will be studying drawdowns specifically. Historical decline patterns for different asset classes and different market conditions. The psychological experience of decline and how it impairs decision-making at varying levels of severity. Positional resizing, which most experts use to reduce size and gradually reorganize during drawdown.
I also set a maximum loss threshold. If this level is exceeded, I will stop trading completely for two weeks, review all recent trades and only return when I can identify the specific process error that explains the loss, rather than blaming it on bad luck.
What I won’t do in particular
The things I try to avoid are probably more impactful than the things I actively pursue.
I do not follow trading influencers and I do not pay for trading courses that promise a specific strategy or system. The value of a trading education comes from understanding the concepts, not mastering specific entry rules that have been tested by different people at different times and under different conditions.
I will not trade more than one market in the first year. The characteristics of each market are so distinct that learning how to read the price trends of stocks is different from learning how to read the price trends of cryptocurrencies or futures. Splitting your attention between them prevents you from understanding the depth each requires.
I will not be adding indicators until I have developed a true reading of price action without them. Most indicators are derived from price and volume. To understand what they measure, you need to understand the underlying price action they summarize. Learning the price action first and then adding indicators as a secondary analysis layer allows you to make better decisions than relying on indicators instead of directly observing how prices are performing.
I will not measure success daily or weekly. The relevant measurement range to assess whether a trading approach is working is at least 100 trades under consistent conditions. Shorter horizons result in noise appearing as signal, resulting in strategy changes that prevent sample sizes from reaching levels that allow for realistic evaluation.
Psychological investment that must be made first
None of the structural elements, single-set focus, detailed processes, and rigorous risk management I’ve described will produce the intended results without a psychological foundation that can be implemented under real market conditions.
The foundation requires two things that are easily underestimated.
The first is to truly embrace uncertainty. Intolerance of uncertainty means enduring unpleasant things. Acceptance, which means internalizing the uncertain outcome of a particular transaction, is not evidence that the approach has failed, but rather evidence of the normal operating reality of stochastic systems. When a correctly executed trade is lost, the right response is not to revisit the analysis to find the mistake. It is important to note that this was an example of the expected 40% outcome and moving on to the next transaction.
The second is separation from daily results. The days your account goes down will feel almost the same as the days it goes up. This is because the information content contained in the results for one day is close to zero in telling you whether your approach is working. This separation is not natural. It needs to be intentionally cultivated, with a continued focus on process quality rather than outcomes, and enough context from the growing performance to know what normal variance actually looks like.
Both of these are learnable. Neither arrives automatically. It is developed through the kind of deliberate practice and honest documentation that the approach described in this article is designed to support.
The Honest Reality This Approach Creates
Starting over with this approach won’t give you quick results. The first year is characterized by some gains, some losses, and a lot of learning that feels slow compared to the impatience that comes with trading.
What it will produce is a true foundation. Single setups are understood deeply enough to be able to trade under a variety of conditions with true confidence. It is a risk management principle built on actual experience with loss rather than a theoretical understanding of loss. A track record that provides honest feedback about where the edge actually exists and where it doesn’t.
Regardless of your approach, the markets will be uncertain. That never changes. What changes with time and deliberate practice is the quality of the relationship between the trader and uncertainty. Clear process. Honest measurement. Consistent execution. These three points, applied to a single, well-understood approach over a sufficiently long period of time, show what durable improvement in trading really looks like.
It’s not interesting. But really.
If I ever had to start trading again this would be my exact strategy. Originally published on Coinmonks on Medium, where people are continuing the conversation by highlighting and responding to this story.