What do I need to become a successful trader? Part 3 is the third article from a series of three, in which I included the most important informations about what it means to be a successful trader (part 1), reasons why traders fail (part 2) and in the third part (this one) I will talk about the reasons why traders succeed.
Why Traders Succeed
There are multiple reasons why traders succeed. Here’s the most important of them:
- Trading with a plan;
- Trading with a backtested method;
- Trading after simple, clear and easy to follow rules again and gain;
- Trading with a good money management;
- Trading with a good risk management;
- Trading with a strong discipline developed over time, which includes daily routines and mental preparation;
- Trading with clear stop loss and take profit orders;
- Solid learning and clear understanding the principles of the financial market moves;
- Solid knowledge of technical and fundamental principles
- A comfortable amount of capital, which allows trader to be patient, careful and develop a strong trading discipline over time;
- Asking for help from experienced traders;
- Reading books about trading;
- Following courses / online courses about trading;
- Thinking and measuring the risk in the first place and thinking about profit in the second place;
- Learning to think in terms of statistics and probabilities – this is one of the most important rules in trading. A trader needs to learn very good that in trading you simply can’t be right 100% and the losses are part of the game;
- Knowing very good the trading method, allows a trader to be confident even in the periods when there are few loses in a row. A good trader knows that with every losing trade is more closer to the winning trades again.
Patience is the key
Now, you know the most important factors which can lead you to success and you also know what you should not do in order to achieve your goals. You need to be aware of one very important thing: the patience. Not only in trading, but in any other domain from this world it takes times and hard work to become the best or at least one of the best, and you know, that is not easy. It’s not either impossible but it’s only up to you to become, or not, a successful trader. I also have a principle which said when you don’t know something, it’s ok, you can learn, but if you know something and you still repeat the same mistakes over and over this is called ignorance and ignorance is one of the biggest enemies of the success.
You also need to be aware that on any path you choose to go, there will be a lot of failures and success is hiding in the ambition of not giving up.
“I have not failed. I’ve just found 10,000 ways that won’t work.”
So, persistence and patience will help you to get over every time you’ll find an obstacle.
Test, find and repeat
One of the best ways to develop a working trading method for yourself is to test it. You’ll find a lot of trading methods, some of them good, some of them not so good. Just take your time and test each trading method that you’ll find interesting. You’ll see that, doing this, first you’ll learn to trust your method, you’ll learn how price react in different market conditions and you’ll also learn to accept the loses. You’ll also learn to get used with thinking in probabilities, and to know the particularities for each instrument.
In your testing periods try to build a set of clear rules to follow, which you can easily repeat. Don’t try to assume the rules before you test but try to observe the price movement and then try to make your own conclusions. Once you make a lot of tests, you’ll see that it will be very easy for you to open your trades and to let them run until they reach their targets or their stops.
One of the most important things you can learn from testing is that it’s all about the numbers and there’s no link to what you deserve or something else, so, the more you’ll learn and practice, the better will be for you.
Mihai Marginean and
Team of Elite CurrenSea