Be Decisive
Hesitation is the most dangerous quality of an inexperienced trader. Hesitation can come from…
- Not having conviction in your trading plan
- Trading a size to large for your account and comfort zone
- Most commonly, lack of experience
The ability to react decisively comes from one thing, experience. The more screen time that a trader has in actively trading the markets and analyzing charts the more conviction they will have when it comes time to pull the trigger.
When you hesitate you are letting the market build up steam, without a defined entry, defined stop, and defined profit target, you will find yourself in the lost world of chasing trade after trade, inherently watching great setups pass you by, only to finally enter as the professionals (the highly successful 1%) are taking profits.
In the book Outliers, Malcolm Gladwell talks about the power of 10,000 to mastery. You can use the time when the markets are closed or not highly participated on to review trade setups and fine tune your edge, inching you closer to those 10,000 hours.
Commit to doing whatever it takes
No one said trading is easy. The most rewarding things in life come from the result of hard work. This trait in particular applies to all aspects success, but as it relates to highly successful traders most started with little or nothing in terms of trading capital, do not have an Ivy League education, and built their success in the face of people telling them they it couldn’t be done.
To become a highly successful trader you must have a level of passion that drives you to do whatever it takes to reach your goal. Without this passion the journey is useless.
Build confidence over time:
- Find something positive about every situation, empower positive self talk
- Congratulate yourself for following your rules, regardless if the trade is a winner or loser
- Stick with one methodology; don’t jump ship looking for a new system every time you have a losing trade
- Trade to trade well and the money will follow
Commit to doing whatever it takes to achieve success and the opportunities will present themselves.
Patience Pays
Be quick to take losses, slow to take profits. Highly successful traders remain patient throughout their trade. When a trade is going against us, we have stops to cut the loss, but when a trade is going in your favor it is also important to have profit targets.
Pre-determining your exit point is a two way street, you must know your stop loss AND your profit target before entering the trade. Pre-determining these levels will eliminate impulse trades, trades that are placed based off feel as the market is coming into your price. Impulse trades WILL cause you to fail.
One strategy to capitalize on winning trades is to scale out of your winners. A loss should always be exited in full at your predetermined stop point, however when a trade is going in your favor, having multiple targets allows for the trade continue working in your favor.
Exiting half the position at your first target, half of your remaining position at a second target, and the last portion (1/4 of the original) at a third and final target can be an effective way to capitalize on your winning trades. Trail stops can also be used for extracting the most out of a winning trade.
Remain Humble
There is no better place to become humbled than the market. In living your life with a level of humility and respect, you will be rewarded. The emotional drive of fear and greed will be the life and death to most traders. The highly successful traders understand that the market is always right no matter what they may think.
Karma will come back around, so give before you receive.
Honestly, keep accurate and detailed records
The importance of a sound trade reporting system is often one area overlooked. Once your trade data has been logged you are then able to go back and analyze commonalities among different setups. Recording market data is another good way to go back and spot common occurrences that you can then develop strategies to profit from.
There are a few good tools out there to help with analyzing your trade data, including Microsoft Excel.  Some of the things you might want to record and analyze are…
- Profit/Loss of each trade
- Time you placed the trade
- How you felt as you entered, during, and exiting the trade
- Total number of trades taken
- Average Risk/Reward per trade
- Winning Percentage
Having too much information is never a problem, so when in doubt, jot it down. Start a trading journal and record your thoughts, emotions, market information, and experiences as go, these are great tools to be able to look back on and extract profitable information from in the future.
Balance: Why do this?
The bottom line in being a trader is to make money, of course. However, ask yourself is what you’re giving up to achieve your goals worth it? Many traders get enveloped in a downward spiral of losing trades and in worst case scenarios, watch their life savings, marriage, and health suffer. Balance is so important if you want to reach your goals with any chance of savoring some level of happiness and fulfillment.
The stress of managing your own business can be immense. The emotional and monetary pressures to provide for yourself and your family can begin to eat away at the fundamental things that we enjoy in life. Simple things to help you live a balanced life are…
- Put your family first, above all else
- Eat healthy meals
- Exercise at least 60-minutes a day
- Get adequate sleep
- Taking frequent walks outdoors
- Organize your tasks for the day into specific action steps
- Dream big, but set realistic and attainable goals attached to a definitive date
We trade for the freedom to run our lives how we choose, not having to answer to a boss or punch in on the clock. Trade to live, don’t live to trade.
If you’re serious about trading for a living, working to incorporate these traits is a step closer towards your goal. Beginning from a holistic approach and outlining why you want to become a trader in the first place will help drive you through the tough times as they are inevitable.
Just like Karma and the law of reciprocity, what comes around goes around. There are no shortcuts to becoming a highly successful trader. Take control of your future today and make the commitment to do whatever it takes to succeed.
This post originally appeared on my website EminiMind.  Thanks for reading and have a great weekend.
Twitter:Â Â @EminiMind
Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.
