Habits Good Traders Have
Countless traders around the globe try to improve each day by implementing various strategies and ideas that would make a difference. You can find a ton of advice for being a better trader whether you are new to the world of trading or an experienced veteran. Applying good habits while trading is a critical part of self-improvement for any trader.
We have a list of 10 good habits commonly found in successful traders:
1. Be Logical Instead of Going with the Flow
When you are trading, it is important as well as profitable to make logical decisions. Taking a leap of faith could cost you dearly when it comes to trading any type of financial instrument because market conditions never stay on the same course for long.
2. Stay Focused and Not Get Distracted
Developing a trading plan or having a reliable trading strategy up your sleeve could result in a successful trading session. But it takes a lot of time to master trading on your own in the presence of hundreds of distractions. Every professional trader first needs to master concentrating on their strengths. Good traders agree that “strategy hoping” will have you grow old without making money from the markets. Stop chasing the holy grail and give your strategy a chance to prove itself. Learn everywhere, first and once you create your own foundation from the information you learned, give your strategy a chance to grow.
3. Manage the Stress Caused by Trading
Trading regularly can lead to increased stress levels irrespective of whether it is one’s hobby, part-time, or full-time job. To become a better trader who does not make rash decisions and stays calm when the market takes an unfavourable turn, you must step away from the trading screen.
4. Keep Emotions Aside While Trading
Any successful trader’s decisions are purely based on logic, rationality, and experience. Whenever emotions lead a trader, the results are always bad. All good trader must make decisions using their brain and not their heart to make profits. It will be VERY hard, but you must try to remove emotions from your trading. It’s important to realize that, like any other business, profits and losses are part of trading. In fact, that’s why we have a profit and loss account in business rather than a profit and profit account. There are no sureties in trading, only probabilities. So, once you have developed your trading system, know what to expect, stick to the plan, and try your best to be robotic.
5. Know When to Hold Em’ & When to Fold Em’
Good traders hold successful trades and exit losing positions early enough. It is common for traders to get anxious about winning trades because they don’t want them to turn into losses. Impatience quickly kicks in for most amateur traders, and they end their trades prematurely, leaving a whole bag of money on the table. On the other hand, these types of traders are slow to cut down their losses; they keep holding onto losing trades, hoping that they will turn positive. This never happens in most cases, so they lose their money and go home filled with regrets. Learn to let your winning trades run and end your losers if you want to be a good trader. The rule of the game is to maximize your profits and minimize your losses.
6. Keep a Record of All Trades
Whether you have started trading a few weeks ago or have been in the long run for some years, keeping a track of your trades will always be useful. Traders keep a journal, keep notes, and even record their trading screens to learn from themselves and understand what works for them. Journaling is part of any performance-oriented endeavor. World-class sportspeople, scientists, top musicians, and top CEOs keep journals as a part of their success strategy; traders keep journals too. As a trader, keeping a journal of your trades or using a 3rd party app that tracks your trades will help you stay disciplined, focused, consistent, and profitable. It records all your winning and losing trades, as well as their respective entry and exit prices. With this, you can make comments and note recurring instances in the market that either got your finger burned or paid you heavily. A good journal should help you identify the weak points and strong points in your strategy so that you can focus on what works!
7. Maintain a Proper Sleep Schedule
At times, trading could be somewhat addictive. It happens when an individual simply throws himself into trading and does not know when to stop. Better performing traders know if they are tired, their performance would depreciate. Therefore, an optimal sleep schedule is better than risking your health.
8. Meditate and Exercise on Time
A typical trading experience is a combination of both ups and downs where each loss leaves a significant mark on us. Many who have just started trading are not successful and that leads to despair. To avoid negative thoughts like these, traders take time off to meditate and exercise regularly.
9. Find a Capable Trading Mentor and Never Stop Learning
Trading all by yourself can be distracting, aimless, and a complete waste of time unless you have a mentor or a goal to motivate you every step of the way. A mentor (usually a more experienced trader) can help unlock your hidden potential. Learning how to trade better is a never-ending process. Even trading veterans never let their guards down thinking they possess sufficient knowledge to trade successfully all the time. There are several educational resources available for those who want to learn more and get better at trading. Set aside some time daily or weekly to engage in educational activities. For example, you could find a book to read, attend a webinar, watch an educational YouTube video or complete an online trading course. Wealthy traders like Warren Buffet and Paul Tudor spend most of their time reading. The most notable entrepreneurs also don’t act like they know everything. They all understand that learning is a lifelong process and that they must keep doing it to achieve their goals. Market conditions change every time, and you need to keep yourself updated with the latest trends and factors that may affect your trading success. Such changes may be brought about by market drivers or innovation. For example, when trading shifted to the internet in the 1990s, investors had to learn how online trading companies work. Those that failed to do so had no choice but to bow out of trading. Understand the power of consistent learning!
10. Be a Part of the Trader’s Community
Being a part of a community is always recommended by experienced traders because it can broaden one’s horizons. In a community, you will find help, information, and answers to your questions related to trading from tons of other traders like you. Although being a part of a trading community or having FRIENDS who are traders, remember to always follow your own advice. It’s good to be around like-minded individuals, but it is not good to solely follow their advice, and not the knowledge of your own, which is the main reason we don’t sell signals here!