What makes a successful trader? What are the commonalities found among successful traders?
Obviously, the first thing that makes them common is profit. People with larger risk capital are likely to be more successful than those who have smaller capital. Why? Because a large capital gives them more freedom from the emotional burden of losing. If someone is fearful of losing "all the money" he has, his decisions might be crippled and he might find it hard to trade more freely.
Second is their method. Successful day traders may have a different approach in dealing with the trades but they all have good strategies and working plans. Everyone has their own way of investing or disinvesting but successful day traders have well organized methodologies which balance good attitude with sufficient information.
There is no single, standard way of trading and an approach like "ride the pendulum" does not make any sense at all. If you want your investment to be lucrative, you will have to play in accordance to the game and make variations in your favor.
Understanding the game is crucial. Successful investors choose their own battles. They don't just hop into the numbers when they see the trends going op or hop out when they notice that it is starting to slide down. They do not trade on anything they do not completely understand. They always wait for the right moment to begin with the trade and they don't let the movement slip once they see it. They invest time on information and observation of the market first before they decide on anything.
A successful day trader acknowledges the fact that he could not stick to his emotional investment, he cannot fall in love with a single type of stock. If he notices that he is continuously losing his shares on a specific trade, he instantly reconsiders his approach and jumps over to a trade that is working for him. He simply does not believe in emotional attachment.
He keeps track of his activities and the activities of other successful traders. He analyzes his own portfolios and make decisions according to his previous mistakes on trading, the factors that made him won some trades and the situations that he could deal well with. He believes in the value of information from his personal experiences.
Lastly, successful day traders use their heads with the right combination of guts and instinct. They give credit to luck sometimes but this is not their focal basis in making their decisions especially the crucial ones.
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