1. OPPORTUNITY. There are dozens of these every day, unfortunately you can’t buy them all, so only pick the top 10 and then narrow them down to 2 to 3.
This is done by using your buying criteria which is part of your trading plan which you already have written down. (Hopefully you have one?)
2. BUYING and SELLING. I have a pre planned strategy which I have developed by trial and error; this was achieved by learning by my trading mistakes and the mistakes of others.
3. PATIENCE.This is definitely a virtue worth developing. Sometimes the market is going up in the right direction, but is not going as fast upwards as you would like. Be patient and use a “stop loss” to lock in those profits. However small they may be. Also don’t always be in a hurry to “buy that next share” just because you have that money burning a hole in your pocket. Do your homework and then you have chosen the right share for the right reasons and not just because it looked good
4. STRESS.If it is hurting! Don’t do it, cut your losses or be content with a small profit and get out. (more…)
Trading is one of the most difficult profession, winning traders have business plans. They have set of rules and guidelines to help keep their ship sailing in the right direction. Business plan in trading would cover time spend to study markets and trading, techniques and strategies to focus on, systems to use, expenses involved, maximum loss per trade, maximum drawdown, objectives and goals, etc. Best traders keep revisiting there business plans and change them when necessary, improving it with each iteration. Last but not least, the most important trait you would see in all successful traders is discipline. Without discipline no trader could be competent, because knowing in not the same as doing. Competence means that one has progressed beyond knowing what to do, to doing what one knows. Discipline makes trader competent.
Successful traders know that success means consistency, more than it means immediate profits. Of course traders want to make money, but to do that consistently, you may have to learn by dealing with setbacks and unimpressive gains. The trick is not only to make money off of trades but to learn WHY you made that money. And if you simply get lucky now and then, you haven’t learned anything you can turn into a consistent strategy of success over a career, or even a lifetime, of day trading.
That’s why successful traders bank on consistent profits. They know that ignoring the small-profit trades and angling for a “grand slam” is a sure way to lose money. No one can repeatedly predict huge gains on any one trade. But many people can and do predict a host of small-profit trades that create the same, if not more, profit than people who get extremely lucky once or twice. (more…)