The most important things traders never forget
1. Plan your trades in advance and follow through – Preparing entry and exit points for your trades is what successful traders always do. This protects you from spur of the moment decisions that are usually taken without taking all factors into consideration.
2. Keep a diary – Write down what and when you traded, so that you can look back at your decision making. A simple history covering when you entered a trade, why you did it and what other relevant circumstances there were is enough to keep track.
3. Follow news that’s relevant and ignore distractions – In the age of 24/7 news coverage, there is always something going on. Or that’s what news channels and journalists would have you believe. Filter the noise, focus only on the things that change the prices of what you’re trading.
4. Don’t trade after a huge loss – Everyone has positions that go spectacularly wrong. But it’s what happens after, that good traders know they should avoid – trading when anger, frustration and the desire to get even rule over your mind. This is the time even huger mistakes are made and it’s best to take a step back and cool off.
5. Learn from consistent winners – there is a wealth of knowledge about markets and trading available and more often than not it’s served in a well structured and researched form. The risk here lies with who is presenting it to you – why are they sharing a risk-proof system, is there a catch. The truth is anyone can profit in the market, but few manage to sustain it. Those are the ones we should learn from.
6. Focus on what works – Instead of constantly looking for “the next big thing”, you should stick to a working strategy once you find it. Most successful traders use only one or two techniques and nothing else. Changing styles muddies the picture and doesn’t allow you to focus and learn all the ins and outs of what might suit you best.
7. Keep your body and mind fit – The market is a rat race and it’s not only a mental thing. Good traders know that you have to take care of your body and this will affect your decision making, attention and endurance while trading. All-nighters or trading for the sake of trading for long hours simply leads to exhaustion and more mistakes.
Do you agree with our list? Let us know if you have some other habit that has brought you success.