The Successful Trader
Everyone wants to be successful in every aspect of their life. Be it ducation, employment and what not? People want to be successful. They seem to think success depends on skills and luck and comfortably forget that habits and traits are also equally important if not more. Sadly in financial trading as well people think skills and luck are enough to be successful. Professional traders never depend on luck. Instead they develop the traits and habits which in turn would determine their trading mentality.
The Traits of a successful trader
Luck can help you on few occasions, but your mentality will help you on many occasions. So it is essential that traders possess these traits. In this article, we shall know the traits of a successful trader and learn how we can imbibe them in ourselves.
1) They are disciplined
Trading is a serious business and it demands a lot of discipline to be successful. Traders who lack discipline are more vulnerable to make emotional trade decisions and will end up with losses. Successful traders will discipline them by adopting a regular work routine. They use this
routine to set limits on themselves like the total number of trades to do per day, the amount to be spent per day etc.,.
Contrary to our perceptions, Successful traders do not gaze through their computer screens throughout the day. They will simply analyse their trade setups, place orders and move on. This will prevent them from panicking and prohibit them from making irrational decisions. Over the long run, it will become a habit. It is advisable to develop a daily routine in trading if you don’t have one.
2) They have a plan
An old saying goes “Failing to plan is planning to fail”. Successful traders have plans which they always stick to. Before placing a trade, they would make plans for that trade. But many traders don’t have a trading plan. They simply participate in the market on their gut feelings or .
Your trade Plan is the foundation in which you build your tower called trade. This plan has to devised considering various factors like the risk tolerance, entry and exit strategies, risk management strategies, loss minimization techniques and long term goals. We must understand the market, be adequately trained to be able to formulate robust plans. We may also seek professional tutelage to make better plans. We must always plan a trade before we place a trade.
3) They record their trade related activities
Some traders make a note of their trading activities, they will be riting all the parameters related to their trade and do a lot of number crunching and figure out their profits and losses. If need be, they will make changes to their trading setups.While this is one way of analysing your executed trade. One more interesting and useful way to analyse is to record your emotions along the numbers, how you felt before taking a trade, during a trade and after taking a trade. This will depict our trading behaviour with respect to our profits and losses.
Many believe that successful traders work extra harder or do more analysis than a novice trader. but the secret lies in being disciplined and developing a plan. As a trader sets out to make financial investment, he has to invest time to develop some traits and discipline required in trading.