11 Important Insights from the Lives of Successful Stock Traders
While successful traders aren’t some out-of-the-world entities, they do have ideas, habits and strategies that are slightly different from that of not-so-successful traders. Although underestimated and underrated, learning from what they do (and what they don’t) can be quite resourceful for individuals looking to make a sustainable and high-rewarding stock portfolio.
Are you a trader?
Here are 11 important insights from the lives of successful stock traders that you can learn from:
1. Understand and establish your own trading style
While you can follow the common plans and strategies like others, to have a long run on the scene, you must understand and establish your own trading style. Maybe you’re risk-taker; maybe your stop-loss position can be much extreme. Identify your style and play to your strength.
2. Be flexible with your trading strategies
There are no hard trading rules and techniques. So you can (and must) be flexible.
3. Make your risk management more thorough
Having a risk management plan is important. Being more thorough with this plan is even more crucial. So don’t be vague, but be definite of your moves to balance risk and reward optimally.
4. Never stop learning
To this day, Warren Buffet read books most part of his everyday. His subjects aren’t restricted to just finance, of course. But the point is, even after being ridiculously successful and rich, he makes time to read and learn. Don’t make the mistake of thinking you know everything. There’s a lot more you have to learn about market, economics, psychology and other subjects, which will eventually come back to help you trade better.
5. Keep your wishes and desires under control
You want more money—and that, quickly. But don’t let that desire sway you to make hasty and irrational decisions. Be calculative. Always.
6. Don’t spend too much time behind computer screen
The more you learn about market and technical analysis, the better will be your judgements. But don’t let this theory trap you in front of your computer for hours every day. Use the right tools, consult experts and avoid long-period of screen time.
7. Know what news to believe and what not
In the stock market, everyday has its own mix of “breaking news”. Playing cautiously with such hypes is important. Not each of them is true. Use your best judgement and resources to spot which one to believe and which one to laugh at.
8. Don’t let your emotions cloud your decision-making ability
Possibly the biggest mistake of beginners is that they trade out of their emotions. Be it clinging to their stock till the very last moment, not knowing when to take profit, trading too many times a week—they let their emotions cloud their sane and data-focused decision-making abilities. Avoid this.
9. Discipline, patience, and consistency are the keys
There are only a handful of mantras that turn a rookie investor into a dynamic stock trader. And they include discipline, patience, and consistency. When put together, they create magic, clearing all the challenges on your way.
10. It’s okay to take losses
If you’re looking to make a sustainable stock portfolio, it’s going to be a long journey with many bitter losses. You need to err… you must learn to take on such small losses for bigger gains.
11. Keep your health at the top of your priority list
In the quest to become one of the best stock traders, it is very common to neglect your health. You, be careful and prioritize your health at the very top. Successful traders are always striving to improve their lifestyle; they eat healthy, exercise, take breaks regularly, and indulge in recreational activities. Remember, you will make only as much money as your health allows.
These are 11 important insights from the lives of top stock traders. Now, it’s your turn! See what you can learn from them.