When things are going well, you feel great. But when your transactions are unsuccessful, your life can turn into a nightmare. You can earn money for weeks and lose everything in a few minutes. This situation is repeated again and again, each generation of traders encounters this. Therefore, everyone should keep in mind this possibility and be ready to break the game. Rational observation and logical reasoning will allow you to find the answers to the right questions.
In this article we will see what actually make the successful traders different. The following 10 cases, we will name these observations, will show the distinctions and will be a success measurement.
1st Observation – The largest number of failures is typical for daily or short-term traders. The reason for this is not even in the compressed time frame, but the fact that many of these traders are deprived of good training and a comprehensive plan for the game. This type of trading does not forgive even minute errors. The manipulations in it are the most risky, whereas the losses caused by the lack of knowledge and training are much higher. Furthermore, these traders often do not have sufficient funds. Successful traders generally trade in the medium and long-term time frames.
Conclusion – Trading in the medium and long-term time frames provides a higher probability of success from a statistical point of view. The same can be said about capitalization, which should be greater.
2nd Observation – The unsuccessful traders use complex systems and methodologies, and based on the recommendations of the gurus. Winning traders, by contrast, use simple technology. They all use a modified version of the existing techniques, meaning a simpler one, or invent something by themselves.
Conclusion – there is a misconception that difficult means better. However, this is not necessarily so. Logically, one can prove that a simple technique tend to be more practical and resistant to false interpretations. In fact, it does not matter if the techniques are simple or difficult. The important thing is if you can use this system to make money or not. So, we can conclude that the most important role in the process of trading plays your own thoughts and analysis. This may explain why often traders who have only two qualities -perseverance and patience, do better than the super-educated intellectuals.
3rd Observation – The losers often rely on computer systems and indicators. They do not spend enough time to study the mathematical foundations of these systems. Winning traders understand the benefits of using a computer, such as the ability to quickly analyze large amounts of data and markets. However, they often do not disdain to draw graphics on paper using outdated tools such as pencil, or use the calculator. They are trying to study the mathematical principles of medium and can draw their own graphics without any computers. They understand the mechanism of the market in depth.
Conclusion –If you want to succeed in any business, you need to understand the principles of operation of all the mechanisms involved in this area.
4th Observation – The unsuccessful traders spend a lot of time analyzing where the market will be tomorrow. Winning traders spend more time thinking about their reaction on how to respond to the current movement of the market and plan their strategy accordingly.
Conclusion - The trader will have a good luck if he can predict what will be the reaction of the crowd in a given situation. If he is able to respond to irrational buying and selling of the crowd with a rational plan of action, the possibility of winning is increased. It can be concluded that to be a successful trader is easier than to be a successful analyst, since the analyst must predict market movements and recommend how to get the maximum profit. If a successful trader would be asked which way the market will go tomorrow, he is likely to shrug his shoulders and reply that he would follow the market wherever it goes.
5th Observation – The unsuccessful traders keep the focus of winning trades, while the successful traders pay attention to losing trades, returns and the proportion of the risk and possible profits.
Conclusion – It is much more important to pay attention to the risk than profit or loss. Lucky traders take into account how much money they can earn or lose, and pay no attention to the right and wrong.
6th Observation – The unsuccessful traders are often unable to control their emotions. Successful traders are aware of their emotions, and proceed to the analysis of the market situation with a clear mind.
Conclusion – If a trader opens and closes positions based solely on emotions, his approach to the market is neither practical nor reasonable. However, those traders who completely ignore their emotions are not right.
7th Observation – The unsuccessful traders are very concerned to be always right. They like the state of euphoria when the adrenaline appears. They love to watch the market 24 hours a day. The professional traders recognize their emotions, but do not allow them to prevail. They do not have to constantly look at the quotes. They are not concerned with being always right, but focus only on what can bring profits.
Conclusion – It is important to synchronize with the market, but it is also important to stay away of mixing the trading with your personal life. Too much tension leads to psychological and physical degradation. Winning traders try to respond quickly to the situation, but for them it is a job, not an addiction.
8th Observation – When an unsuccessful trader loses, he buys a new book or system and starts working on it. Successful traders analyze what happened and adjust their methodology based on new findings. They do not move immediately to a new system, and do so only when it becomes clear that the old system has failed.
Conclusion – The most successful traders keep their developments. Often, they use one or two techniques, whose profitability has been proven with time. Using a not so very good system is better than jumping from one to another.
9th Observation – Losers choose as examples famous traders who have made a lot of money and try to copy their techniques. Winning traders view all new strategies, but use them only if these are suitable in terms of their own approach.
Conclusion – Once again, we see that the identity of the trader, his knowledge and the personal strategy is much more important than the great achievements of the gurus.
10th Observation – The unsuccessful traders often ignore many factors that determine the probability of making a profit. Winning traders understand that profit is related to the "cash flow". The market should attract more money than leave it. All that influences this process must be considered.
Conclusion – Anything that affects the profitability must be taken into account.
The successful as the unsuccessful traders consider trading a game. But the first ones don’t look at it as a pastime, but as a vocation, so they dedicate themselves to it.
The correct method of target selection can have an amazing effect on the results. The difference between the approaches of professionals and non-professionals is obvious. The first ones shoot at the goal, while the second are closer to roulette.