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3 Things You Need To Be A Successful Trader

November 10, 2014

So you think you can trade? Many traders, especially the beginners tend to think that trading is easy.

Attracted by glitzy returns promised by various marketing campaigns, new traders tend to think that investing or trading is going to be an easy money making machine. And I am often asked why is it so?

One of the key reasons is that contrary to traditional business, it is much easy to start a trading business. Have extra cash, open a discount brokerage online account and voila, you are all set. Money rolling in!!

The reality is much different. Ask any experienced trader and he is going to tell you that trading is probably the toughest thing you will do for an easy life. There is no doubt that many traders have made a lot of money, much beyond what one could do from day-to-day job, but this also a fact that even professionals find it difficult to trade market. Ever heard of Warren Buffett’s famous bet where he says that majority of the professionals can’t beat simple S&P500.

Ready2Trade

I personally think that one needs to experience at least one full market cycle before concluding that trading business is yours. In current market cycle term, it means having at least about 7 years of experience i.e. Bear market of 2007-09 and then bull market from 2009 onwards. While some may say this market is different from XYZ times, yes it maybe but just like any other business trading and investing also boil down to some common attributes.

It goes without saying that in order to operate a business successfully you need to understand it well i.e. all inputs, all the levers that control the output. Be it things like why should you trade, which market, long-term or short-term, which strategy and why, which broker, which system and the list goes on.

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I have been searching to find what makes a good trader, what allows some people to excel, while others continue to languish? In this quest I have been talking to many successful traders and based on my research and conversation, I have summarized into three human qualities. The good news is that all three can be learnt. The bad news is that you have to TAKE ACTION.

So lets get started.

The first quality is PREPARATION.

Let’s define what preparation is first –
Oxford defines preparation is The action or process of preparing or being prepared for use or consideration.

Preparation is a PROCESS, a complete process that enables you to trade. Will you skydive without learning how to? without having proper gears? Will you fly a plane without knowing how to fly? No, absolutely no. Then why is it that a beginner thinks that open an account, fund it and buy your favourite stock and the money will start rolling in?

PREPARE2TRADE
OP Income Newsletter You Preparation determines 60% of your outcome. In order to prepare better, you need to be absolutely clear on why you want to trade, which markets to trade, do you want to be short-term trader or long term trader? Not just that but also do you understand the platform you use, the asset class you are going to trade? Before you could even press that buy or sell button you have to understand language or terms of the underlying you are going to trade, do you have sufficient infrastructure that allows you to trade? In order to even determine buy or sell, do you have proven trading systems with greater than average likelihood to profit? How are you going to manage your own psychology?

Do you understand you decision making process? i.e. in which conditions you make better trading decisions, do you have a process to find what works for you and what doesn’t so that you can continue to leverage on your strengths?

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And that’s just the beginning. As market change, economic cycle change, do you have a way to roll-in/ roll-out strategically?

It is not easy but it can be done. There is no rocket science behind. Find a coach, or a mentor. Do background check before you start spending even a single $$. Even finding a good coach requires preparation. Talk to some real traders, people who have been through this journey. Continuously sharpen your craft.

Remember success is not a destination, it is a journey. The better you are prepared for the journey, better the journey is going to be.

Let me know if I can help you, ask any questions you have, leave those in the comments section and I will revert to you within 48hrs.

Stay in touch for the next skill. This skill separates pro from the novice. Without it , there is no success regardless of how prepared you are. In fact, it is so crucial that nothing great is achieve in life without it.

(OPN subscriptions are currently open, If you would like to join a POWERFUL, PROVEN AND PROFITABLE trading ideas newsletter, please click here).

Profitable trading, OP

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