What does it takes successful Trader? Is it Possible to be a Successful Trader? What are the ways to be a successful trader in stock market? Well, many traders both experienced and novice players often find themselves asking these questions either to themselves or to others! If you’re one of them, you haven’t understood trading till now! Read on to know why!
Successful trading requires peace of mind which comes from following few mandatory Psychological principles. It is one of the most profitable as well as a risky profession which calls for occasional mental agony, can lead to multiple failures and success. It is mandatory for a trader to be calm and confidence while trading. We can say its all mindset and trading edge that dictates Success!
We can achieve the right mindset by following these factors:
Implement Real Life Situation In Trading
Mostly, the worst decisions we take in our lives are the ones taken while we think extremes. In markets, it is quite similar. Overconfidence or lack of confidence leaves the trader in losses. The trader must understand the edge he or she has while trading and if the edge is not present they must not trade.
It is not mandatory to trade every day (even if you’re a Day trader). Traders must seek the edge, reap profit from the opportunity present in the market, and sit back for a while till the next opportunity arrives. This process will also help in avoiding losses and provides peace of mind.
“Success in trading and life comes from knowing your edge, pressing it when you have the opportunity and sitting back when that edge is no longer present. The worst decisions, in life and markets, come from extremes: overconfidence and a lack of confidence.”
Don’t be Addicted To Trading
Addiction to trading is a common mental issue seen in many traders and sometimes it goes to such an extent that professional help is needed. A trader can be called as addicted to his business when he becomes irresponsible to his health issues, family matters, financial responsibilities; all he wants and needs is to trade.
This causes heavy turmoil in family life as well as in the trading business because mostly this addiction comes from “making up for the losses” mentality, neglecting work-life balance etc.
Maintain Trading-Life Balance
Social connection is mandatory to avoid a situation like trading addiction. It is necessary to maintain proper work-life balance. Work-life balance can be defined as a fine line between maintaining healthy personal life and professional career. With technology taking on personal relationship and space, traders are forming an emotional attachment with their business which in turn becomes an addiction.
Traders need to spend time for leisure activities and personal things. When there is no such work-life balance, the trader mostly losses the concentration and his or her productivity decreases over time which can result in losses.
“There are times when trading becomes a vehicle for destroying mind and soul. An addiction occurs when an activity provides a strong source of stimulation that, over time, leads to psychological and sometimes physical dependence.”
Consider Trading as a Performance activity
To be successful in trading business, a trader must be a performer like a chess player. He should focus more on his practice than actual performance; better performance will come from proper practice and determination. Trader must spend time in analyzing historic Price action of the stocks; fundamental analysis has to be carried on to know the intrinsic value that is the right price of the share. The trader should also spend time on practicing the strategies and analyzing them before implementing them directly into trades.
The trader must also realize where he is going wrong and how to change his strategies or the process of trading. Learning new strategies is always helpful, continuous knowledge about the markets are mandatory for successful trading. The trader must accept changes to become a successful trader. He should interact with other traders, professionals, analysts to gain knowledge which in turn will help him in trading.
“High ratio of time spent in practice/rehearsal relative to actual performance”
Like any other sport or performance activity, trading must be done with discipline. The trader must have a proper schedule for every activity like weekly analysis of the fundamentals, tracing changes over a week or month in shares he has invested etc. Discipline along with practice is the key to better performance as a trader.
