Your trading career will be frustrating if you think you can control the prices or be on the right side of the market every time. It’s impossible to do so. If trading was an easy job, then why did 95% of traders fail? They don’t build a proper trading system and don’t know how to trade like successful traders. In this article, we will discuss a few habits of successful traders that will help you find financial freedom through trading.
Plan a trade & trade a plan
Every trader should have proper planning before placing a trade. A trader will not last long in the financial marketplace if he doesn’t have a plan before every trade. But it is also not worthy enough to make a plan for a trade if you don’t follow it. In trading, you should not worry about where the price of a stock is going. All you have to worry about is what you are going to do when the price gets there. Once you have taken the trade, you cannot control the price of a stock. It’s not up to you anymore. So after taking the trade without proper planning and then worrying about the price will not help you do well in the trade. So it will be better for you to stop worrying about the price after taking the trade, and you should concentrate on your exit points. If you have a proper plan for your trade, it will stop you from making an emotional decision. Following a trading plan will also help to operate your trading without stress.
When you buy shares of a company, you need to ask yourself how much capital you are willing to lose on this trade. If the trade goes well, when will you take your profit, and what will be your exit strategy? Are you willing to add more shares if the price goes your way? If your trade doesn’t show a profit for many weeks, what are you going to do?
If you have proper planning of a trade, you’re trading becomes automatic. Because you know how to react with the changing of price, where to take your entry, where to add more shares, and where to take profit. A proper trading plan will help you to make your decision professionally. You don’t have to ask for other’s opinions for your trade. You will not be afraid of letting your profit go away and having a significant loss.
In your trading journey, you will find many traders asking questions like, “I bought X stock at Y price, should I hold it?” in Facebook groups or trading forums. How can anyone trade like this? If you don’t know about your exit strategy, how can you make a profit from trading? Do you think a stranger can help you like this in trading who doesn’t even know about your trading strategy? If a trader had a trading plan and is disciplined enough to follow, he would never ask for help from strangers.
This type of mentality among novice traders is one of the biggest reasons to fail in trading. They love to follow others people’s opinions rather than think about the trade on their own and improve their strategy. When a trader creates his trading plan, he doesn’t have to wait for outside opinion to take action. If you find yourself in a position where you have to ask other people’s opinions, you either don’t have a trading plan or are not following it appropriately.
Work hard until you learn to trade properly
Trading is like any other business. Can you become a doctor after attending a seminar or watching some videos, or reading few books? You can’t. But you will find many people invest their capital just after attending a seminar or watching some trading videos. They want to become Market Wizard within a short time. People who run those trading seminars will make you believe that trading is an easy job to do and you can earn money just after investing. Novice traders fall into this trap and lose their capital.
If you find some successful traders in your trading journey, ask them about their trading careers. You will then understand how much time and effort they gave in their life to become successful.
You need to ask yourself whether you are interested in trading or want to come here to make money. If you aren’t passionate about trading, you can’t succeed in this field because you have to put lots of effort into learning. It can’t be done just after a seminar or watching some videos or reading some books. It takes few years to understand the core concepts of trading and become a successful trader. You can’t make money at the beginning of your trading journey because you have to give your effort and time to learning. When you are here only for money, you can’t give much effort because you are not getting money in return. You have to understand that every successful trader gave lots of their time to learn this skill, and you have to do the same.
Many traders are not even interested in reading some basic stock market books. It seems backbreaking work to read some books and learn basic stock market principles. People with this mentality will surely blow their account within a few months, no matter how much money they invested. To become successful in trading requires appropriate knowledge, and you need to give ongoing effort throughout your journey.
Stay confident while trading
Trading is a very stressful career because you have to deal with money on a daily basis here. Dealing with money regularly will cause you tremendous mental pressure, and the level of stress you have to deal with is enormous. You have to maintain a balanced life to eliminate the stresses from trading.
You will never find a stressed person who succeeds in life. Successful traders stay calm and confident about trading most of the time. You have to be a relaxed person while trading because if you are not, you will make lots of bad decisions in trading with emotion, which will cost you money. But it is tough to eliminate the stresses from trading and be a relaxed trader because when a trader finds his trades running negative, he will be worried. It’s normal, and you can’t be a stress-free trader by reading some articles or attending some seminars. It takes years to become a relaxed and confident trader. There is a massive difference in the thoughts of novice traders and experienced traders. Whenever a novice trader finds his trades running negatives, he feels that he must do something to stop this. But when an experienced trader faces the same situation, he accepts that every time he opens a position, he risks a fixed amount of money. If he follows a successful trading strategy, he will be in net positive at the end of the month. So he doesn’t take emotional decisions just after seeing his trades running negative. Checking the price five or ten times after buying a share will not provide you a better result. It will be just a waste of time and will force you to do something stupid. As long as you follow your trading plan and follow every rule of your strategy, you don’t have to watch the price the whole day. Use your time properly, which will provide you more free time and keep you stress-free.
A person who thinks trading is like gambling will never make money in trading. If your thoughts are wrong in trading, then how will you make it? You have to be a disciplined person to become successful in trading. You have to take all the responsibilities of your trading action rather than blaming others. You have you build a proper trading system that will fit your personality. You should test your trading strategy many times before you invest real money here. You have to be confident while trading because if you are unsure of what you are doing, you can’t make it. If you work hard until you learn to trade properly, stay cool while trading, and follow all the habits of a successful trader, you can be successful in trading.
Read part one of the article “Habits of a Successful trader“