How to be a successful trader :thumb:
“Success and trade” together sounds nice, however it’s not as easy as it sounds. Being a trader requires N number of things and qualities. The main requirements are-
1. Being Patient: Patience is something which should be available with the trader in respect of a successful trade. This can earn wonders and also lead to a successful flair. There come situations when the wind is blowing the other side and it’s hard to acquire the desires. That situation demands patience and a calm head to take bold decisions under pressure. Share market is never a profit oriented market, it’s always been a risk oriented one so the trader should trade with an empty head and a lot of patience of horse.
2. Take your trade as a serious business: Trading should be taken a business as it’s not a child’s play that can be won by playing video games. Even Video Games also give affirmative results when we take it serious. We devote our time and concentrate on the game to win because if we’ll not take it serious, we would never succeed. Same is the case with trading. If you devote your time, trading will not affect your pocket and will not cost you however if you ignore it’s going to be a chip on your shoulder in future. Like any business, trading incurs expenses, losses, taxes, uncertainty and risk, and these factors must taken into account.
3. Be prepared with a trading plan: High school teenagers are taught “One, who fails to plan, plans to fail” and it’s practically applicable throughout. Without planning can land you nowhere and you will have no one to blame. Everyone should be ready with a plan and also a backup plan to recover from the failure of plan 1. Good trading plans are based on experience and a constant observation on market. Research and testing should be done before trading on any particular scripts. Yes, it may be time consuming in the beginning however it’s the only expert advice for a smart trade. However for many, it’s difficult to develop a trading plan, even if the plan is available, it’s not that easy to be implemented. Follow the trade plan exactly made earlier based on the research and testing without deviating and further guessing. Any trade showering profits, but made outside the plans is a result of greed and is considered as bad trading. Often bad trades are result of lack of control over emotions i.e. Greed, Overconfidence, Impatience, Panic, Expectations etc. Trade involves your money and it should be made with an intention to grow.
4. Use the latest tools and platforms as an advantage: Use the tools provided by us as an advantage to your trade. Introduction of electronic trade was a boom in the security market and the innovation of latest tools and up gradation is consistently tweaking and evolving. Faster computers, introduction of 3G’s & 4G’s, direct access trading, android apps, java apps brings the retail investor a step closer to trading. Mobile trading apps make it possible to scan for trading setups, enter orders and manage positions from a smart phone or tablet. Technology is upgrading day by day and introduction of new tools is an add-on in everyone’s life. It makes trade easier. The trade should be executed at the drop of the hat.
5. Only invest that money which you can afford to lose: Trading should not be done under any sort of pressure. The money involved in trading should not involve stress of the trader. He should trade to trade, not trade to double or triple his money. The money invested should be that money which is kept aside after planning the budget of the house, daughter’s marriage, son’s studies and many more retirement benefits. If the money involved in trade supersedes any of the more important use of money, it will not allow you to trade calmly. With a pressure to earn, it may lead you to take decisions out of your plans.
6. Swallow your losses: Your attitude towards trade should be, “How much can I afford to lose!” not “How much I can win”. With this viewpoint if you trade, you can become triumphant, but if you are trading the other way, I feel sorry for you brother but you are investing at a wrong place. Go and invest in some saving bank scheme or so. Almost every person trade with a hope of winning, even it is right, but trading is not only about winning. Learn from your losses is the only expert advice that most of the trading giants follow. Losses are a certainty in trading, and despite claims that some trading plans are 100% profitable, the reality is they will earn you only 40% of the promise. You should not aim to win the maximum however set your target to lose the minimum.
7. Use the correct advises: The trade done by a newcomer is not possible to create wonders. If you are a newcomer, you should entertain experience shared by others and follow some expert advice. New to trade requires more focus and dedication to learn how to survive in this market. This market is risk oriented and the terms and conditions may bounce the newcomer, the transaction charges, the taxes may blow off your head, the trading deductions may annoy you. So you are required to work upon some advices and learn the most from them. Do not accept advises from everyone, they may deviate you.
8. Keep trading in a panorama: Win or lose are a part of a traders life and you should accept it to keep your emotions n check. Your victory should not make you euphoric nor should a loss turn you despondent. It’s just one step along the path to long-term profitability. Because trading is a business, it is the cumulative profits that matter. Being focused is not a duty; it’s a part of it.
9. Protect Capital: Use Stop loss while trading. Stop loss will make you play safe under any adverse situations. The stop loss would prevent you from excessive loss. The stop loss would come into place when the market is not going your desired favor. Set the target limits so that as soon as the target is reached, you can buy/sell the security to play smartly. Trade using cover order and many more. The capital invested is an important money for you and you should not lot is slip from your side easily.
10. Know your exit strategy: Before entering any position, traders should have an exit strategy. Many of them feel that money is earned in the exit. It means that regardless of where a position is entered, it’s the exits that determine if it is a winning trade or a losing trade. Regardless of approach, it is important to have an exit strategy in place before entering any trade. It can mean the difference between not only a winning and losing trade, but a winning and losing business. Exit strategy should be included in the trading plan and define how the trader will get out of both winning and losing positions.
“Success and trade” together sounds nice, however it’s not as easy as it sounds. Being a trader requires N number of things and qualities. The main requirements are-
1. Being Patient: Patience is something which should be available with the trader in respect of a successful trade. This can earn wonders and also lead to a successful flair. There come situations when the wind is blowing the other side and it’s hard to acquire the desires. That situation demands patience and a calm head to take bold decisions under pressure. Share market is never a profit oriented market, it’s always been a risk oriented one so the trader should trade with an empty head and a lot of patience of horse.
2. Take your trade as a serious business: Trading should be taken a business as it’s not a child’s play that can be won by playing video games. Even Video Games also give affirmative results when we take it serious. We devote our time and concentrate on the game to win because if we’ll not take it serious, we would never succeed. Same is the case with trading. If you devote your time, trading will not affect your pocket and will not cost you however if you ignore it’s going to be a chip on your shoulder in future. Like any business, trading incurs expenses, losses, taxes, uncertainty and risk, and these factors must taken into account.
3. Be prepared with a trading plan: High school teenagers are taught “One, who fails to plan, plans to fail” and it’s practically applicable throughout. Without planning can land you nowhere and you will have no one to blame. Everyone should be ready with a plan and also a backup plan to recover from the failure of plan 1. Good trading plans are based on experience and a constant observation on market. Research and testing should be done before trading on any particular scripts. Yes, it may be time consuming in the beginning however it’s the only expert advice for a smart trade. However for many, it’s difficult to develop a trading plan, even if the plan is available, it’s not that easy to be implemented. Follow the trade plan exactly made earlier based on the research and testing without deviating and further guessing. Any trade showering profits, but made outside the plans is a result of greed and is considered as bad trading. Often bad trades are result of lack of control over emotions i.e. Greed, Overconfidence, Impatience, Panic, Expectations etc. Trade involves your money and it should be made with an intention to grow.
4. Use the latest tools and platforms as an advantage: Use the tools provided by us as an advantage to your trade. Introduction of electronic trade was a boom in the security market and the innovation of latest tools and up gradation is consistently tweaking and evolving. Faster computers, introduction of 3G’s & 4G’s, direct access trading, android apps, java apps brings the retail investor a step closer to trading. Mobile trading apps make it possible to scan for trading setups, enter orders and manage positions from a smart phone or tablet. Technology is upgrading day by day and introduction of new tools is an add-on in everyone’s life. It makes trade easier. The trade should be executed at the drop of the hat.
5. Only invest that money which you can afford to lose: Trading should not be done under any sort of pressure. The money involved in trading should not involve stress of the trader. He should trade to trade, not trade to double or triple his money. The money invested should be that money which is kept aside after planning the budget of the house, daughter’s marriage, son’s studies and many more retirement benefits. If the money involved in trade supersedes any of the more important use of money, it will not allow you to trade calmly. With a pressure to earn, it may lead you to take decisions out of your plans.
6. Swallow your losses: Your attitude towards trade should be, “How much can I afford to lose!” not “How much I can win”. With this viewpoint if you trade, you can become triumphant, but if you are trading the other way, I feel sorry for you brother but you are investing at a wrong place. Go and invest in some saving bank scheme or so. Almost every person trade with a hope of winning, even it is right, but trading is not only about winning. Learn from your losses is the only expert advice that most of the trading giants follow. Losses are a certainty in trading, and despite claims that some trading plans are 100% profitable, the reality is they will earn you only 40% of the promise. You should not aim to win the maximum however set your target to lose the minimum.
7. Use the correct advises: The trade done by a newcomer is not possible to create wonders. If you are a newcomer, you should entertain experience shared by others and follow some expert advice. New to trade requires more focus and dedication to learn how to survive in this market. This market is risk oriented and the terms and conditions may bounce the newcomer, the transaction charges, the taxes may blow off your head, the trading deductions may annoy you. So you are required to work upon some advices and learn the most from them. Do not accept advises from everyone, they may deviate you.
8. Keep trading in a panorama: Win or lose are a part of a traders life and you should accept it to keep your emotions n check. Your victory should not make you euphoric nor should a loss turn you despondent. It’s just one step along the path to long-term profitability. Because trading is a business, it is the cumulative profits that matter. Being focused is not a duty; it’s a part of it.
9. Protect Capital: Use Stop loss while trading. Stop loss will make you play safe under any adverse situations. The stop loss would prevent you from excessive loss. The stop loss would come into place when the market is not going your desired favor. Set the target limits so that as soon as the target is reached, you can buy/sell the security to play smartly. Trade using cover order and many more. The capital invested is an important money for you and you should not lot is slip from your side easily.
10. Know your exit strategy: Before entering any position, traders should have an exit strategy. Many of them feel that money is earned in the exit. It means that regardless of where a position is entered, it’s the exits that determine if it is a winning trade or a losing trade. Regardless of approach, it is important to have an exit strategy in place before entering any trade. It can mean the difference between not only a winning and losing trade, but a winning and losing business. Exit strategy should be included in the trading plan and define how the trader will get out of both winning and losing positions.
