How to become Successful Professional Trader
Trading is never taught in schools and colleges, hence it become difficult for people to understand that it can be learnt. You must understand that market will punish random gamblers; it has some structure, which allow traders to identify opportunities and apply learnt strategies to grow money.
‘The Biggest Enemy to Your Trading Success Is Not the Market It’s You Only’
Follow below rules for becoming Successful Professional Trader: –
Define your trading goals and select a suitable strategy that fits your personality
Each trader is different from other be it taste, liking etc. Trader need to think with own perspective and constraint. Some traders are comfortable with day trading as they have enough time to spend, some are not having much time so they are OK with positional trading. Each trader follows their strategy based on his research and understanding. It is important to have sharp understanding of Moving average or Bollinger bands or any other indicator as all the indicators lead to one understanding where you can enter and exit and make money. Here is how to be a successful trader focus. For example – do you:
- Like trend lines – find a way to trade with trend lines
- Like fundamentals – form a strategy around fundamentals
- Like moving averages – build a strategy based on moving averages
- Like to identify support and resistance levels – build a strategy on support and resistance levels
- Like specific indicator (RSI/MACD/BB etc) – build a strategy based on Indicators
- Like price action and Volumes- form a strategy around price action and volumes
- Like Day trading/Positional Trading- Form a guideline based on Time frame.
One need to work on specific strategy and practice on those for previous charts and make ones understanding clear about entry and exits. Trading a random strategy, you just found, will not give you any further edge in the markets.
Remember that there is no specific equation, which is working in market. You need to take decision based on tested understanding. No trading method will always work, and you will not earn money to simply take a trade when the MACD crosses or RSI is oversold or Moving Averages crosses.
The best traders spend the time to learn a strategy that suits them, build a trading system and has patience building the confidence to trade with no fear.
Keep your Trading simple, avoid using too many indicators and keep Trading journal
One need to make a Trading plan which has all aspect or specific aspect to follow and they execute the trade based on these plans otherwise no trade. Trader follow the checklist for buying and selling and tick when applicable understanding is met and trade with confidence. Trading plan is based on ones likes and understanding of market. Successful trader will not have many indicators, they have 1 or 2 indicator and study well only those, practice with those and follow only those. Trade plan is having specific set of conditions written for entering and exiting. The best traders never trade on emotions, tips and whatever catches their attention, because they know it does not work in the long run. The best and consistently profitable traders have a winning trading plan, plan their trades and then trade their plan. So, should you. If trade plan says no entry, successful trader will not take entry forcefully.
You want to benefit from preparing; therefore, execution of your Trading plan is key.
Learn from Every Trade
For successful trader learning never stops. I know many traders that cannot figure out why they do not have the returns they know is possible for them to have. I have tried to explain to them that they need to track what they are doing to identify bad habits.
Without a trading journal where you track your trades, it is hard to remember exactly what made you act in a certain way at the time.
The best traders track their trades that enables them to learn from every trade and thereby advance as a trader so they can make profit consistently with genuine stop loss hit.
Tracking your trading does not have to be complicated. Use a simple marking on chart, Excel document or pen and paper where you write down the security, date, price, your stop price, setup, and your thoughts.
Better Money management
This rule is for some reason easily forgotten or ignored. You cannot be right with your market timing all the time. If you are wrong with respect to your trade plan, get out. Listen to that little voice in your head telling you that you are wrong. I have heard traders say, “I know I am wrong” – as they continue to hold on to their position and lose money. Hanging on (and on, and on) to a trade is where a lot of the money goes. Generally, as soon as things start to go wrong in your trade, you are better off closing the trade. Do not hang around hoping and wishing (I will wait just one more day… and one more… and one more…so on”). Meanwhile, new setups with high edge occur continuously. At the first sign of being wrong, GET OUT.
Never trade with borrowed money. It also should be understood that the money in your trading account should not be allocated for paying the loans, bills or other important obligations you might have. You must be prepared to lose all the money allocated to your trading account.
If you have best trading strategy and you know how to do position sizing then do you think that you will be a successful trader, answer is no. Because 60% success come from the psychology factors, if you not able to control psychology like emotion, fear, greed you are not a successful trader. 90% trade loss money only because of their psychology. Millionaires come in all shapes and sizes, but many of their good habits remain constant, across the board, no matter who they are. Take the time to cultivate these habits. You might start small, by waking up a little earlier each day. But, ultimately, you want to refine all of these millionaire habits, including good saving habits, developing the ability to self-reflect, redefining your definition of failure and maintaining a strong commitment to giving back to your community.
It is important, during your growth as a beginner trader, to practice good habits, such as cutting losses quickly to minimize the risk of a potentially large disaster, even if small losses are frustrating to take.