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Winning Traders: What They Have In Common

Roughly 95% of people who try trading for a living fail within the first year. These are not very good odds and it is natural for new traders to wonder if they have what it takes. Below is a list of 20 characteristics I believe could be found in most winners. I also included some Truths about trading.

The methods used by winning traders are exceptionally diverse and despite the wide spectrum of traders, certain characteristics are found in most winning traders:

Winning Traders:

  • Have a trading plan with a strategy that incorporates effective money management. They have the discipline to execute their plan relatively flawlessly and the self esteem to accept the money the market gives them.

  • Use their head and stay calm they dont get excited or depressed because of their trades. They dont act on emotions. They can handle success and failure without self-destructing.

  • Don't trade to feel good or to get high.

  • Handle trading as a serious intellectual pursuit.

  • Always protect their capital because they know they cannot trade without it. This means that they dont get caught up in the thrill of the moment, the excitement of a running stock they dont jump into careless trades.

  • Love trading, trading is a passion and they spend a large portion of their time trading and learning about trading.

  • Know that sometimes the best thing to do is to do nothing (sit on their hands). They do nothing unless there is something to do.

  • Don't pay attention to other peoples opinions, they make their own.

  • Don't try to guess the future – they know it is a game of probabilities. They understand that they will always have a percentage of losing trades but they keep the losses for those trades small. They dont hesitate to get rid of a position when the loss is still small.

  • Have a great respect for the markets and they never think taking money from it is easy.

  • Behave like professionals. They take full responsibility for their actions and dont look for something or someone to blame. Instead they use their losses as an opportunity to improve their plan.

  • Trade to trade well, not for the money.

  • Don't count how much money they have made or lost because they know this would influence their judgment. They focus on trading well.

  • Spend just as much time figuring out their exits as they do their entrances.

  • Don't let their emotions dictate when to close the position, which would result in small gains. They know emotions cannot be part of the decisions.

  • Don't have any expectation as they understand it can go either way and that nobody can know the future.

  • Have confidence in their plan, patience, and discipline.

  • Are not afraid because they have developed attitudes that prevent them from getting reckless.

  • Have self-monitoring skills and can continuously monitor their performance in order to improve it.

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