Wednesday, May 5, 2010

Secrets of Successful Traders

How would you describe a successful trader? Is it someone who makes lots of money, is it someone who stays at home and makes their money in their underwear? No, to me a successful trader is someone who loves what they do and "Makes lots of money". I have met many stock traders that hate their jobs, but do it because it pays the bills, and I don't consider them successful.

There are some secrets to how people become successful traders, and it all starts with learning and it ends with learning. Everyday you will learn something new and if you don't then you are falling behind your competition. The great thing about the stock market is the competition is yourself. If you can't beat yourself at a game then why play, right? Now I don't want you to think I am not going to tell you the secrets of how to become a successful trader, so here they are. Make sure you save this or at least write them down.

Keep records: Any successful trader keeps records of every trade they do. They know when they bought in, the highs, lows, splits and mergers of the company while they were watching the stock or holding it, and they know when they sold and what the return was. You need to keep great records, because you never know when that very stock may hit a trend and you can profit from a second go around of the stock.

Stay Focused: Many market traders watch the news daily and are always reading what the press is saying about certain companies, but the biggest thing that drives the market is FEAR. There are 3 emotions that drive the market, greed, uncertainty, and FEAR. Fear is where you make your money, you buy when nobody else wants to and when the price is low and sell when everyone else is being greedy and buying at higher prices. But stay focused, the market over exaggerates news so don't trade on over exaggerated news.

Trade Daily: Many successful traders trade stocks daily, and this is because if you are only trading every few days you are losing out on lots of money that you could be earning. Think of trading as your job, you clock in at the opening bell and you clock out a little after the closing bell. Take the time to trade daily, it will pay off big and you will thank me later.

Look Back: The only time I ever tell people to look back is when the day is over. You need to look back at the end of the day and see what you missed and how you can improve the next day. Don't look back on the bad things, take your losses and learn from them. Take your gains and figure out how you can make a bigger gain.

Now that you know these secrets of the successful traders you can go out there and start trading to make money. Don't just trade because you are scared or because you don't like to see losses. "Trade to make money".

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