Trading involves more than just using a trading system. There are several characteristics and traits traders need to develop to help them become better traders. Here’s a look at what to consider.
How can I set up a perfect trading system? This is a question many traders ask themselves. When a trader looks at a trading platform and sees prices moving, they have, at least once, wondered what the institutional trader sees above and beyond the price movements.
The general thought process is that if you have had positive trading experiences in the past, there will be opportunities to make positive returns in the future. But the opportunities available in the future are set by the resolutions we make today.
As a trader, I would apply the following steps to my trading philosophy:
Discipline: It’s important and we all think we incorporate discipline into our trading. But realistically, most traders lack this necessary trait. Ultimately, when a trader believes in what they know and do what they need to do without a second thought, they can be considered to be disciplined. Say, for ex-ample, a trader believes they should cut their losses short and add to their winning trades. If they’re able to do that without thinking twice, think of them as disciplined.
Records: Keeping records is an important part of trading, and not just for accounting purposes. Reviewing past trades give traders the opportunity to study their trading habits. The past records act as guiding principles and can help traders manage future trades. Professional athletes watch videos of their performance to help them improve their game. Traders can adopt this approach.
Integrity: Traders typically like to blame someone or some-thing else for their losing trades. But when it comes to successful trades, they’ll take full responsibility. A good trader will take responsibility for both their losses and wins. This gives them integrity, another necessary trait required for good trading. Only then will a trader be able to examine their own decisions and improve on the bad ones. Say you hang something up on the wall and it keeps falling. Wouldn’t you make the effort to figure out why it keeps falling and fix it? It’s the same with trading. Having a thorough understanding of the reasons behind your losses will help you better control your losses
Victory: This has a lot to do with how traders react to fear and greed. Traders often are oblivious to whether greed or fear drove them to their success or failure. The trick is to not let greed take over when a trade is making a gain, or let fear take over when a trade is losing money. The best a trader can do is balance their emotions. That way, they will see more consistency in their performance.
Education: Even a small amount of correct knowledge can go a long way toward improving a trader’s life and lifestyle. Traders need to get into the habit of continually learning and keeping abreast of current events. This helps them to make educated trading decisions. There are different ways a trader can obtain the education they need. They can choose a mentor, attend seminars or workshops, read books, and so on. The trick is to choose what matches your needs.
“The opportunities available in the future are set by the resolutions we make today”
Note: This article is copyright @ the traders magazine , Technical Analysis of Stocks & Commodities