Archives of “successful traders” tag

rss

Count down 3, 2, 1 to develop as a trader

  
  Education
#  #  #  #  #  #  #

Count down 3, 2, 1 to be a trader!

3) Focus on the psychology and mental skills that are necessary to succeed in the market.  Learn to read the market charts in terms of the pscychology of the other traders.

2) Learn about risk control in depth.  What this really means, options available to you, how you can marry it up with your financial objectives in the market place etc.

1) Only when you have the above dialled in should you investigate ways of putting trades on in the most advantageous positions to generate the returns you are looking for.

I think if people were to count down 3, 2, 1 there would be many more successful traders. 

Get Out When You’re Wrong

  
  Education
#  #  #  #  #  #

wrong1Successful traders know that discipline is what allows them to enter their trades when the odds are in their favor and, more importantly, to get out when they’re wrong.
Being right is not the problem. What you do when you’re wrong is the crucial issue.

There are a lot of traders who buy then pray while the market goes against them, because they think that it will eventually go their way.
Most traders average down and wait for the market to turn their way.
Trading my way, I always have defined amount of money that I am willing to lose.
I let the market decide how much money I’m going to make.

12 Difference between Losers & Winners Traders

  
  Education
#  #  #  #  #  #  #  #  #  #  #  #  #  #  #  #

1.       Losers trade against the trend, but winners trade the impulsive wave of the current trend.

2.       Losers have no money management because they aim quick profit; but winners target steady profits by risking 2 or 3% of their investment.

3.       Losers don’t set stop loss order expecting to be faster then the market in case of reversal; winners know that any time news can make the price reacts suddenly. Therefore use protective stop loss in case of news release.

4.       Losers have no trading plan, they emotionally jump in and out of the market when the price moves; winners build solid entry and exit plans.

5.       Losers cut early their winning trades and let losses run and wipe out their account; but winner s cut quickly their losses. When the trade is positive, they set the stop loss to the break even to protecting their profit. Otherwise, they open to 2 lots to closing the first lot when the stop loss value is reached and let the second winning trade run with a trailing stop from the breakeven until it is touched.

6.       Losers do trade many strategies at the same time, but have mastered none of them; winners master one successful strategy and move to the other.

7.       Losers think the market or the broker is against them, winners don’t fight against the market they try to understand it; they know how to choose between brokers with objective criterions.

8.       Losers think Forex is gambling; but winners develop skills, discipline, self control, and patience, they work hard for being successful traders. Winners learn from their mistakes and constantly improve their main trading strategy.

9.       Losers perform emotional trading after the release of alarming news, winners respect their trading plans.

10.   Losers do overtrading, they even trade at the daily pivot point; winners trade the best opportunities at support or resistance according to the price reaction.

11.   Losers can trade a bad risk reward opportunity; winners aim good risk reward with ratio such as 1/3 or 1/4. A won trade protects their portfolio from several small losses.

12.   Losers use any strategy or expert advisor without back testing it; but winners know that long term profitability is one of the key of Forex trading success. Winners don’t focus on the percentage of winning trades.

Lessons from the Wizards

  
  Education
#  #  #  #  #  #  #  #  #  #  #  #  #  #  #  #  #

3994One of the first books I read in this business oh-so many years ago was Stock Market Wizards. It had a profound impact on my thinking about trading, psychology, risk, capital preservation, etc.

  1. All successful traders use methods that suit their personality; You are neither Waren Buffett nor George Soros nor Jesse Livermore; Don’t assume you can trade like them.  
  2. What the market does is beyond your control; Your reaction to the market, however, is not beyond your control. Indeed, its the ONLY thing you can control.

    To be a winner, you have to be willing to take a loss

  3.  HOPE is not a word in the winning Trader’s vocabulary;

  4.  When you are on a losing streak — and you will eventually find yourself on one — reduce your position size;

  5.  Don’t underestimate the time it takes to succeed as a trader — it takes 10 years to become very good at anything; 

  6.  Trading is a vocation — not a hobby (more…)

Get Out When You’re Wrong

  
  Education
#  #  #  #  #  #

wrongSuccessful traders know that discipline is what allows them to enter their trades when the odds are in their favor and, more importantly, to get out when they’re wrong.
Being right is not the problem. What you do when you’re wrong is the crucial issue.

There are a lot of traders who buy then pray while the market goes against them, because they think that it will eventually go their way.
Most traders average down and wait for the market to turn their way.
Trading my way, I always have defined amount of money that I am willing to lose.
I let the market decide how much money I’m going to make.

Self-esteem and Trading Acccount

  
  Education
#  #  #  #  #  #  #  #  #  #  #  #  #

Does your self-esteem rise and fall with your account equity? If so, your probably in for some difficult times ahead with you’re trading. For some traders, a trade is more than a trade, it can represent how successful they are as a person, how much status they feel, etc.  When your self-concept is closely tied to your trading outcomes the result is a yo-yo effect in terms of your self-esteem and your internal state.  And our internal state has a lot to do with how well we trade.

Trading already involves a lot of uncertainty, and tying one’s sense of self-worth to the ups and downs of trading is unnecessarily adding emotional volatility to the picture and is usually not a good idea.

Most traders need to work on being more resilient in the face of disappointment. Trading will always involve disappointments, its part of the territory.  A delicate balance between being fully engaged in the trade with a ‘watchful curiosity’ and without being overly attached to the outcome, is how many successful traders describe their internal state.

Unsuccessful Traders :Make the same Common mistakes

  
  Education
#  #  #  #  #  #  #  #

mistake-ASR1 .They like to use complex system, lots of indicators, where they are telling the same old story (price & volume). As I learned so far simple system is the best.

2. They spend more time in trading, then learning, we already know successful traders spend more time improving themselves & their systems then trading, they are very selective.

3. They lost their capital, before the learning process. To become an expert it takes years of right experience.

4. They think but they don’t see, they think market will go up or down so they buy or sell, but they don’t see what the chart is trying to show them.

5. They want to control the market, which is impossible.

6.The have gambling problem.

7. They don’t know when to stop.

8. They think they know every thing, they don’t take advice.

9. When they go through bad time, they change their system, time frame & market.

10.They try to get rich over night.

11. They are very risk adverse people, so when they lose, they can’t tolerate it, they start impulse trading & end up losing more.

12. They never learn their lesson.

Most Important Qualifications for a Successful Trader

  
  Education
#  #  #  #  #  #  #  #  #  #  #  #  #

qualifications1I believe that one of the most important qualifications for a successful trader is “POISE”, which to me is defined as stability, a well balanced person with dignity of manner – as it relates to the stock market.
A poised person is a person who can handle their hopes and their fears in a calm manner.
The other qualification is “PATIENCE” to wait for the opportune time, when as many factors as possible are positioned in the traders favor.
Poise and patience are the close friends of successful traders.
The final qualification is “SILENT”. Keep your own silent counsel – keep your victories and your failures to yourself – learn from them both.
Poise, patience and silence are attributes that must be cultivated.
These virtues do not come automatically to the stock market trader.

Trading Sins

  
  Education
#  #  #  #  #  #  #  #  #  #  #
  • over-trading
  • too much leverage
  • under capitalization
  • not adhering to stops
  • trading without a plan
  • paying short thrift to proper execution
  • assuming too much risk, not respecting it
  • trading products I don’t fully understand
  • competing where I have no edge
  • becoming too emotional
  • under-valuing the need for ample liquidity
  • misaligning time-frames (the time a trade typically needs to play out, versus my expectation/need for it conclude)

Successful traders fail all the time. In fact, many even fail a majority of the time. The difference is that their failures are not a failure to execute their plan. The failure rests in the fact that the expertly chosen trade turned out to be wrong (nobody can be right 100% of the time – except Congress). And when the trade was wrong, they took their loss which resulted in minimal damage to their portfolio and moved on to the next opportunity.

The Wisdom of Paul Tudor Jones

  
  Education
#  #  #  #  #  #  #  #  #  #  #  #  #  #  #  #  #  #  #  #

Here are some noteworthy quotes from the 80′s (yes 80′s) PBS special “Trader“, highlighting Paul Tudor Jones and his partner Peter Borish’s trading strategies. I’d like to thank Rodrigo for sending me this special, as I wasn’t familiar with Jone’s career. Even after a decade in the business you can still keep learning from successful traders in the hopes of fine tuning one’s craft.

What I found refreshing about Jones is his commitment to helping underprivileged high school students and his pledge to pay for their college education as long as they complete high school. And more importantly, the giving of his time each and every week to intervene in their lives.

“If life ever ceases to be an educational experience, I probably wouldn’t get out of bed.”

When the headlines are extremely negative day after day and the market refuses to go down, it’s “telling a different story than what the headlines are.” When the markets sell off in the morning and are bought up in the afternoon, it’s a sign of quite accumulation.

“After awhile size means nothing. It gets back to whether you’re making 100% rate of return on 10k or 100 million dollars. It doesn’t make any difference.”

“Trading requires an energy level, and it’s very difficult to sustain it 24 hrs a day, which is what this requires. To do the job right requires such an enormous amount of concentration that you’ve got to be able to…it’s physical and emotionally mandatory to find some time to relax, and you’ve got to be able to turn it off like that.”

“The whole world is simply nothing more than a flow chart for capital.” (more…)

Go to top