A great trader is one who is A, consistently profitable, and B, one who is in total control of emotion, each and every trading day. It’s as simple as that. Although getting there may seem simple, it doesn’t mean that it is easy! Over time, you will notice that all of the great traders out there have very familiar traits. Ultimately, they are extremely self disciplined and follow rules they set out for themselves. Do you want to be a great trader? Do you have what it takes? Check out our list below to see what we have discovered about great traders:
Stick to a plan that works!
There are many different trading strategies out there. Whether it is day trading, swing trading, scalping, position trading, options trading, futures trading, forex trading, crypto trading, short selling, or any other strategy, you want to develop one that works for you. Once great traders find out what works for themselves, they tend to stick to it!
Read the news everyday!
Be in the know! Great traders are always in the know, and they have many resources they use to get the golden information. Great traders love tools such as scanners (Trade Ideas), reliable & breaking stock trading news platforms (Benzinga). Being in the know is an advantage for great traders and allows them to operate the markets like driving a car.
Wake up early and get out of bed!
The early bird gets the worm, you’ve heard it before, you’ll hear it again. Waking up doesn’t mean opening your eyes and laying in bed on your phone. Get out of bed, get the blood flowing and your mind right. Being up early and being ready to seize the day is crucial. It is an advantage that must be taken advantage of. If you have trouble waking up early, you’re going to need to grow up and go to bed earlier. It’s not impossible, and if you’re not willing to do this, you may not be cut out to be a great trader.
Keep the brain and body nourished!
After waking up, drink water and add some electrolytes to that water for a bonus. If you’re up early this means you can stretch out. Get limber and pliable before you sit down and trade. Traders are known to sit at a desk a lot, so it’s important to stretch those muscles out daily to keep the pains away. Great traders are also very well nourished, and they spend money on themselves to stay nourished, because they know that they are their biggest investment. Don’t skip meals, get solid food with vitamins in you. Feed the mind what it needs to maximize your decision making. It’s an advantage that the great traders happily take advantage of.
Don't give in to greed!
Greed is an interesting aspect of life. Many would say that a great trader is greedy just because he/she makes a lot of money trading. There may be some truth there, however, it’s not allowing greed to make bad decisions is the key for this one. Giving into greed isn’t a good strategy over time. A great trader is well diversified, knows when to take profits and knows when to take the loss. An example of greed in trading would be buying a company at it’s highest price at the end of an uptrend because you want the profits everyone else already got.
Know when to take your profits!
Understanding where to take profits is really what separates the most profitable traders from other traders. It’s a mental aspect of trading that takes time and complete control to master.
Do not over trade!
Sometimes the best trade is no trades. It’s a part of the game, and if that cannot be accepted, you won’t be able to trade properly. Overtrading can lead to losses and bag holds that you never really wanted to own in the first place. Know when to call it a day and throw in the towel. Great traders always stay in control and in the drivers seat of their portfolio.
Learn from losing trades!
Don’t let losses kill you. Learn from your mistakes, that is the true way to success for much of anything of life. Don’t make the same mistakes over and over and over again. Be better than that, that’s what great traders have trained themselves to do. Even great traders will have failing trades, however they will not let the losses get to them and destroy their mental game.
Don't let fear run your life!
It’s ok to be cautious when trading, great traders are very cautious at times. It’s different to be scared, and to fear the market. Fear can lead to bad decision making. Fear can lead to FOMO (Fear of Missing Out), which is a trait of bad trading. If you know your risk, and you know what you’re doing, what is the reason to be scared of the markets? Learn how to be great, and grab life by the horns!
Proper sizing and stop loss!
Great traders find it best to have a plan going into any trade. They know where they would stop out and where they would take profits. If the trade doesn’t work how it was expected to they understand it might have failed, and they have no issues to move on and focus on something else. When great traders meet their profit goal, they close position and take the win.
A strategy that could be used to help mitigate a bad timing of entry is sizing in. Sizing into a position means buying only a partial size of what you want your whole position to be. For example, buying 1/4 of your position at a time, once a day for 4 days until you have bought 4 times. This can allow you to get better entry opportunities on trades.
Have fun and live a balanced life!
What’s the sense in getting rich if you stare at the ticker tape all day? Seriously, great traders work extremely hard, but they also know how to balance their energy. Get out and live, be balanced. Live a normal happy life, that truly brings you and the people that mean the most to you happiness.
“It’s the people you love not the money and stuff that makes you rich.”
These are the eleven habits of great stock traders. The more you learn, the more you earn! If you have any questions or comments about the best trading habits and practices, feel free to use the contact form below to get in touch with us.