There are a great many different types of traders, and within each category there are sub-categories, and sub-sub-categories, etc. Traders will adopt their own style of strategy. It is not a "one size fits all" market. Anyone looking to join the list of stock market traders and make money in the short or long term should decide which strategy or strategies work best for them.
Traits of top traders/investors
It is important to understand, and if possible, emulate the qualities that most top traders/investors have, to profit from the stock market! Many of these qualities can be developed if there is a willingness to succeed. With a commitment to improvement in one’s trading skills, and adhering to certain business stratagems, profiting from the stock market, in whichever form a trader feels comfortable, is feasible. Here are some traits of successful traders that may be of help:
- Personal responsibility - Probably the most important trait that all top traders have (or top people in any field) is the ability to assume total responsibility for what happens to them. And for top traders and investors, this means that they assume total accountability for their investments results.
- Commitment - Becoming a successful investor/trader requires hard work. Traders must get to know themselves intimately because they are the source of their trading performance. They must develop a business plan to guide their trading. They must develop and test three or four strategies that fit within the big picture (as they see it) and then become part of their business plan. They must do their homework constantly. They must set routines and follow certain disciplines during the day on a constant basis. And all of this requires a lot of time and energy - and it is only the people who are really committed who will put in the work necessary to become successful.
Control of mental state - There are many tasks to be adhered to when trading, but the key to following those tasks is control of one's mental state.
Each task requires a particular mental state in order to execute it properly and a trader must have the skill to step into that state and perform the task. There are many tasks required, some of which are - daily self-analysis, daily mental rehearsal, developing a low-risk idea, following the lead, taking action, monitoring, terminating bad positions, taking profits, daily debriefing, periodic review, etc.
For example - One of the tasks of trading is the action step of terminating or taking profits. The mental state required is 100% commitment to action. There is no thinking involved -- just 100% action. A trader should already know what to do when they get this signal because they’ve already developed a system that works. Thus, their job is simply to act. Think about when the tiger starts to leap on the antelope. They don’t suddenly think to themselves, “Is this a good idea?” If they did that, they’d probably miss the antelope and break their back. No, their mental state is 100% commitment. Well, each essential task of trading requires a particular mental state and traders must have the ability to step into that state.
- Top-down discipline - In developing this sort of discipline, a trader must go through a series of steps in regard to their expectations in life, and particularly what they wish to achieve from their trading, the action needed to achieve these goals, until the final stage of reality where success is achieved.
The net result of following these steps is that they develop a top-down discipline that helps them develop commitment and achieve almost anything they set their mind to achieving.
No matter the style of a stock trader, and the category it falls into, or which best matches their stock buying interests, all types carry risks and potential to the trader’s financial well-being.
There is a place for all traders and investors, and while there are winners and losers in the market, the important thing is for traders to pick a comfortable place and not to let anyone force them out of their comfort zone, particularly if they are doing well.
Personal FinanceDay trading has many advantages and, while we often hear about these perks, it's important to realize that day trading is hard work.
TradingFor traders to achieve true discipline, they need to more than just accept the idea.
TradingProfessional traders build skills to last a lifetime, not just through the next rally or selloff. Cultivate the psychology and skills that make a successful trader.
TradingAny trading career will have its ups and downs. Find out how to maximize the good times.
TradingThe currency markets are full of myths that can harm a trader's chances at success.
TradingDiscover tips from a long-term strategy that can help you make better short-term trades.
TradingFind out how investing success can be more about your mindset and less about the markets.
TradingLearn how to recognize and adapt to tough times in the markets.
TradingLearn to keep your losses to a minimum and consistently produce positive results.