The majority of individual traders are dabblers. They pick a stock here and there, get lucky now and then and suffer some hits at times but keep making enough money to keep them plugging along.
You can make some decent money with a casual approach to trading and it can be pretty entertaining as well. You might not be served drinks while you are sitting in front of the computer, but the odds of making money are much better than the odds of winning at a casino.
Eventually the day may come when you want to be more serious about this endeavor. The potential to make some real money is there but it requires a different approach and some real effort. No one ever totally masters the arcane art of trading but here are the steps you need to take to move to the next level.
You must have a certain minimum level of capital to trade effective. There is the problem of trading restrictions if you are a 'pattern daytrader" that does not have a minimum of $25,000 in your account. More importantly, capital gives you patience. When you trade with too little capital one of the biggest issues you face is not giving trades enough time to work. You can't be a serous trader if you don't have the cash.
Once you have sufficient capital in place, then you need the right tools. You need a good low cost broker, a news service and a charting program that allows for careful study. Services like RealMoney.com and Sharkvesting.com will help feed you a steady diet of market insight and ideas to consider.
If you are working a full-time job you will need to carve out time to dedicate to the task of trading. Good trading requires some continuity of effort. You can use stops to manage trades to a great degree but you need time to watch the action, study your trades, look for new trading candidates and to develop tactics and strategy. If you can't devote a good chunk of time to this, you will find it very hard to advance your trading career.
Develop a Routine
A routine is powerful because it frees you of mundane details and allows you to focus your efforts on the things that produce the best results. Experienced traders tend to perform the same tasks on a regular basis so that they are in position to trade without distractions when the opening bells ring. They systematically review charts, news and market conditions but, more importantly, they systematically review their trading and make plans about what they will do next.
Once you have tools and a routine in place the real work of becoming a better trader can take place.
No approach to the market is inherently superior. Every trader has to find an approach that works for them. Some people will do best with a trend following approach and others will do better with a fundamental or value approach. There is an endless number of ways to approach the market. What works depends on your particular personality and mindset.
Developing that style is where you have to focus your main effort. The best way to do that is to study your trades over and over and look for ways to improve them. Analysis your entry points, the way you built the position, how you set stops, what did you fail to take into consideration. Traders often fall into the trap of doing what they have always done without any real examination of the results. They make some money but they don't push themselves to constantly improve. You have to be willing to be uncomfortable at times to make productive changes.
Break down your trading into small components and look at them closely. The best way to do that is to keep a detailed trading journal. Writing down your insights will help you to internalize them and if you read them over and over it will become part of your routine. The goal is to have a very complex set of rules that you consider with each opportunity you examine.
Trading is like any sport or game. You improve at it by doing it a lot and by being very self-aware. If you want to improve you have to focus on finding ways to improve and you do that by looking at every trade you make and thinking about all aspects of it.
Keep a very detailed trading journal and look hard at every trade you make. Tinkering with your mechanics and developing a strong style is the heart of becoming a good trader. You become a master by focusing on the details of the process
Never Stop Learning
On traditional Wall Street, new traders work in large firms and learn from other experienced traders. That is harder to do for an independent individual trader that is sitting at home. There are many good mentors on the internet but it is a different experience than learning in person. You must be self-taught to a great degree but there are many good resources to consider. Just associating with a group of serous trades will help you grow. I've been operating a chatroom for over 20 years at SharkInvesting.com and I learn new things from the folks in that room everyday but you must make an effort to use that information effectively in the context of your own trading.
One problem that traders face now is that there is too much information at times. Much of it is low-quality and a distraction and should be ignored. Business journalism is often driven by a need for eyeballs rather than a desire to provide useful information, so you have to stay focused on the things that are truly helpful to you. We try to do that every day on RealMoney.com but read what is written with an eye toward finding ways to be a better trader.
All the above will help you move your trading to the next level but above all else you have to have desire and drive to do the necessary work. Trading is a fantastic career and it can be extremely lucrative but the reason it is lucrative is because it is difficult and requires hard work.