Archives of “successful trading” tag

rss

Consistency is the Key

  
  Education
#  #  #  #  #  #  #  #  #

Consistency is an essential component for a successful trading career. This is how you achieve confidence and become comfortable with “riding a trading bike”.

Psychological comfort is the key to a long term trading career and is achieved by becoming consistent with small profits. If you can make consistent $ per day: it can be increased drastically within a year and become exponential in long term.

When I hear from students that their goal is ”to make a lot of money“, I always emphasize that there are few essential steps that must be achieved prior : building confidence by achieving consistency with small lot size is the step that cannot be skipped. (more…)

Keys for Successful Traders

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

mentalstrengthThe biggest obstacle to successful trading is failing to recognize that losses are part of the game, and, further, that they must be accommodated. The perfect trading system that allows for only gains does not exist. Expecting, or even hoping for, perfection is a guarantee of failure. Trading is akin to batting in baseball. A player hitting .300 is good. A player hitting .400 is great. But even the great player fails to hit 60% of the time! Remember, you don’t have to be perfect to win in the markets. Practically speaking, this is why you also need an objective money management system.

experience

It takes experience to succeed. Now, some people advocate “paper trading” as a learning tool. Paper trading is useful for testing methodologies, but it has no real value in learning about trading. In fact, it can be detrimental, because it imbues the novice with a false sense of security. “Knowing” that he has successfully paper-traded during the past six months, he believes that the next six months trading with real money will be no different. In fact, nothing could be farther from the truth. Why? Because the markets are not merely an intellectual exercise, they are an emotional one as well. Think about it, just because you are mechanically inclined and like to drive fast doesn’t mean you have the necessary skills to win the Daytona 500.

 

Trading Rules – For A Survival Of The Trader

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

1. Plan your trade. Trade under the plan.

2. Write down your results.

3. Keep positive mood irrespective of your losses.

4. Do not bring the market from work to home.

5. Constantly raise level of your purposes.

6. Buy during bad news and sell during good.

7. Do not be afraid to buy at high position and to sell at low.

8. Always have well planned time for market studying.

9. Isolate yourself from opinions of others.

10. Always be quiet, persevering and consecutive; operate rationally.

11. Never enter into the market because you are bored to be out of the market. To be out of a position is also a position.

12. It is not necessary to enter and leave from the market too frequent.

13. Traders usually study not at profits, but at losses. Study every loss for improvement of the knowledge about the market.

14. Successful trading is combined and often accompanied by negative emotions. The most important element of successful trade is you are.

15. Always discipline yourself to follow certain rules in advance.

16. Do not allow big profits to turn in big losses

17. You should have the plan, you should know the plan – and you should follow it.

18. Perceive losses with advantage.

19. Halve your profit and never risk more than 50 % of profit operating against the market.

20. A key to successful trade – self-studying.

21. There is no so much distinction between getting in the market and losing there in natural abilities, that in ability to study the errors correctly. (more…)

Stock Market Success

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

SUCCESS11)  The psychological model – What makes great traders, this model  asserts, is self-mastery.  Great traders don’t necessarily possess  better trading methods or secrets, but apply common wisdom more  consistently, with less emotional interference, and therefore with  better risk management.  Developing trading expertise is a function of  developing oneself in this model.  

 2)  The scientific model – What makes great traders according to this  model is superior research.  Markets exhibit cause-effect  relationships, and these relationships shift over time.  The role of  research is to uncover these patterns and capitalize upon them.  Such  a model is, in a sense, the opposite of the psychological model.  It  hypothesizes that, once you discover inefficiencies in the  marketplace, these can be incorporated into mechanical systems that  eliminate any troublesome human elements from trading.   (more…)

Typical Traids of Top Traders

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

artimg52

First, let me say that I know of examples of successful trader’s that don’t have each of the characteristics that I would say the “typical” good trader shares. So there are exceptions to each of these. (more…)

George Soros – "It's not whether you're right or wrong…"

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

The full quote – “It’s not whether you’re right or wrong that’s important, but how much money you make when you’re right and how much you lose when you’re wrong.”

Soros’s style of trading is very unforgiving and he is always ready to admit when he is wrong and cut his losses. Admitting one’s mistake is one of the key things to successful trading – he or she will be psychologically prepared to take action to reduce their losses without much delay.

How many of us always hold on to unrealized losses, and hope or even believe that the stock will regain its price? I guess many of us are guilty of that. Some stocks drop in price for a reason and there are even more reasons for them to drop further until you realize how bad your unrealized losses are!

As Soros take huge positions and high leverage in his trades, he has to be decisive to cut loss so as to lose as little as possible when he is wrong. On the other hand, when he is right, he make sure his profits can more than overcome his losses several folds. He understands he cannot be right all the time – the principle is to minimize your loss when you are wrong and maximize your profit when you are right.

Personal Strengths and Weaknesses

  
  Education
#  #  #  #  #  #  #  #

We all have different personal strengths and weakness.  Many people focus on transforming a weakness into a strength. While that is admirable, the reality is that it’s not always possible. Although I agree with the basic idea of brain plasticity, and I whole-heartedly agree with the idea of always striving for self-improvement, I also know that as humans we have a certain degree of natural-born temperament and not everything about us can be changed.

Although we can’t always build or change every weakness into strength, the good news is that we can always leverage our strengths, if we know how. And that is mighty powerful. It’s so powerful that if you leverage the right strengths in the right way they can do an excellent job of not just counter-balancing your weaknesses, but can propel you so far ahead  that those weaknesses pale in comparison.

One of the most powerful things you can do for yourself is identifying your natural strengths and then work to see how you can build on them.

We all have different personal strengths, and knowing how to leverage them is an important part of successful trading. A major consideration here is that you try to identify and leverage your own personal strengths, and not simply copy someone else’s. All too often I see struggling traders running from one style to another style whenever they see someone else’s success. One of the primary reasons why copying someone else’s trading style doesn’t always pay off in trading is because of different personal strengths.

Focus on the Bulls Eye

  
  Education
#  #  #  #  #  #

Every day that we trade, we need to ensure that we have a specific goal in mind.

Without any goals, we will never know if we had a successful trading session or not. Profit is not the only indicator for success.

The best traders continue to fine tune their goals and the target gets smaller and smaller. If you aim for the bulls eye, even if you miss, you still end up with a good result, because when you aim small even if you make an error, those errors are also small.

Typical Traits Of Top Traders

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

Temperament – In general, people with more analytical and even tempered personalities make better traders.

There is a counterbalancing trait which is the willingness to take risks. Some traders with volatile temperaments are successful because they can take risks easily and can keep trading after getting knocked down. They also tend to blow up more often.

Character – Humility is a very important ingredient in trading success. The truth does not care what you think of yourself. The markets don’t care what you want to believe reality is. Trader’s that are humble are better able to examine their methods and trading objectively and make changes where appropriate.

I’ve known a lot of successful traders that most people might consider arrogant but when it comes down to their own success and the reasons for that success they were able to see the faults in themselves and their trading. The trader’s that were out of touch with reality tended to blow up and have short-lived success.

Intelligence – General intelligence is correlated with success but not as highly as you might think. The ability to discern patterns and relationships with limited information is very useful.

I’d say that you need to be relatively smart to be successful but not extremely smart. Smart enough to understand the principles but beyond that it doesn’t necessarily help you. I’ve seen many very smart people tie themselves up in knots by second-guessing themselves.

Social Skills – Most of the really successful traders are not very socially skilled. Many tend to be reclusive and introverted. There are some exceptions. (more…)

Go to top