Most traders question themselves too much. They contemplate if they have the right ‘stuff’, including the right trading education which is a big piece of the puzzle. But an even bigger question remains, do they have good trading habits?
A good trader understands that they are not born… they are built. Built upon the foundation of good HABITS.
Good trading habits are a must in the financial markets. There’s a reason why only 1% of day traders in the world are consistently profitable. Profitable traders all have similar behaviors and tools they use to facilitate their success. However, to have reached their current success, there was most likely a moment in their journey when they decided to put their bad habits to the side and stop the insanity.
A trader who cultivates good habits naturally has a higher chance of meeting their goals than one who doesn’t. A trader with bad habits makes erroneous mistakes daily. Mistakes that are often avoidable. Successful traders are creatures of discipline. Regardless of dynamic markets, traders who are successful execute their plan day in and day out.
Traders that consistently lose are fickle and often change their plan or don’t have one at all.
It is very possible for traders with bad habits to find good habits. Unfortunately for some, it may take them having to blow up multiple accounts before they realize that their bad habits aren’t conducive to becoming consistently profitable. Profitable traders are poised, process oriented, and unbiased.
Unprofitable traders are anxious and outcome dependent. Traders who put immense amounts of pressure on the outcome of a single trade are only setting themselves up for a category 5 hurricane of emotions, either positive or negative depending on which way the trade plays out.
Traders with good habits are never in trades that they feel pressured to win.
In addition to being overly dependent on the outcome of a single trade, unprofitable traders also move their stops or don’t use stops at all.
Another attribute of a trader with good habits is that they never listen to the ‘hype’. They may hear what the media or reports provide, but they use it to their advantage. They don’t let it alter their plan.
Successful traders prepare and stick to a defined and refined plan. There is no adjusting or questioning it. They are unemotional and concentrate on the process. They are a machine. They focus on building habits that help them remain unbiased in every opportunity.
It’s simple. Traders who don’t have good habits will almost always lose money in the markets. The only way a trader can turn their compass is to start identifying and building good habits.