Reblog: 7 Habits of Highly Successful Traders
There are seven things that I believe are pretty common in the successful traders I have known, read about, and seen in action. Whether it is stock trader Nicolas Darvas in the sixties, commodity trader Ed Seykota in the twentieth century, or Jesse Livermore at the turn of the last century, many of their principles hold true to this day. The closer I get to these principles, the better I trade. The farther I stray from them, the worse I do. In trading, discipline pays. Adopt these seven habits of highly successful traders.
- Traders must have the perseverance to stick to trading until they are successful. Many of the best traders are the ones that had the strength to push through the pain, learn from their mistakes, and keep at it until they made it.
- Great traders cut losing trades short. The ability to accept that you are wrong and put your ego aside is the key to personal and professional success.
- Letting a winning trade run as far as it can go on your time-frame, ensures that you have big enough wins to cover your small losing trades.
- Avoiding the risk of ruin by leveraging a small portion of your capital on each trade. If you risk it all often enough, you will lose it all eventually.
- Being reactive instead of predictive on actual price action is a winning principle I have seen in many rich traders. Letting price action give you signals is a trading reality. Trading based on what the price should be is wishful thinking.
- Great traders are bullish in bull markets, and bearish in bear markets, until the end when then trend bends.
- Great traders care about making money more than anything else; proving they are right, showing off, or predicting the future is not as important as hearing the cash register ring.
The original article is written by Steve Burns, appears on newtraderu.com and is available here.