How Do You Become A Successful Trader?

Posted by Finance Professional on May 14, 2011 under Stock Market News | Be the First to Comment

Most people’s experience in the Equity Market is relatively short and in no way profitable. They hear about the market and think it is an easy way to make a lot of money in a very short space of time. Now we are not saying this can’t be done, because for some this is true, but for the majority it’s certainly not the case. Let us explain in more detail …

In the early stages of most Equity trader’s career, the first trading decisions normally come from tips and recommendations from brokers, alert services, or sometimes even mutual novice trading friends. Then, at some point, traders decide to study the market and try to find the perfect system or methodology to trade with. We are sure you can relate to the following statement; for many traders, the Stock market and its nuances truly become a passion that takes up limitless hours of searching on the internet, books, and forums, in the hope to find the perfect stock trading system, which they ultimately find out, simply does not exist.

Traders develop or buy a system and start trading way to soon. Sometimes it is profitable, but when it has a few losing trades (which is normal), they change the system. After some time, and after more losses and frustration, most give up and stop trading altogether. Or, they go on over analyzing, keep paper trading and never get any financial success from their trading; hopefully a few realize that the trading strategy they are using is not the actually problem and the most important element in their trading is actually them.

A sound set of trading rules is critical to trading profitably. But if the rules are not followed, an average trader will have difficulty maintaining a profitable trading strategy. Ironically, a disciplined trader who has an average skill set and a sharp mind can make a consistent profit with even an average trading system.

All traders encounter setbacks at some stage; either the market conditions change or they don’t follow their own rules. However, if good money management is followed these setbacks can be overcome. Often, even after trading profitable after several months, many great traders stop trading to evaluate and critique their own strategy. Traders will always have doubt and fear controlling those emotions and sticking to your disciplines in essential to stay consistently profitable.

Here Some Common Traps Traders Fall Into:

A. They stop trading for periods at a time and lose their market feel and discipline.

B. They find a new strategy, read a new book, but never fully implement what they have learned and how it pertains to their existing skill sets. Many new traders get confused and are apt to make grave mistakes and become to aggressive without controlling the emotional ups and downs one experiences over many years within the equity market.

C. Over analyze what happened. Mostly it will be that market conditions had changed or they didn’t follow their discipline.

Most equity traders who go on to achieve greatness:

(1) Always Monitor the markets, trade small amounts and don’t force trades.

(2) Wait for market conditions that suit their trading style.
Trading success is a result of consistency, discipline and patience and most importantly self belief… When you have a trading plan that involves clean price action strategies, and that is built on practical workable parameters and it suits your personal and financial requirements, and you stick to it, then your Equity trading will become more profitable.

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