20 Habits of Wealthy Traders

1)      Patient with winners and impatient with losers

2)      Making money is more important than being right

3)      View Tech Analysis as a picture of where traders are lining up to buy and sell

4)      Before they enter every trade they will know profit target or stop exit

5)      Approach trade no.5 with the same conviction as the previous 4 losing trades

6)      Use naked charts

a)      As we mature we begin peeling off indicators

b)      Prices action is key

7)      Comfortable making decisions with incomplete information

8)      Stopped trying to pick tops & bottoms long ago

a)      They make their money in the meat/middle of a trend (wait for confirmation)

b)      A trend is much more likely to continue than it is to reverse

9)      Do not think of the market as expensive or cheap

a)      Ignore whether you think something is overpriced or understand, think price action

10)  Aggressive with trade size when doing well or modest when not

a)      Do more of what is making, less of what is not

11)  Realised that the market will be open tomorrow

12)  Never add to a loosing position

13)  Judge trading success on anything but money

14)  Read about mobs, riots and human psychology, example:

a)      The wisdom of crowds by James Surowiecki

b)      The art of strategy by Avinash Dixt and Barry Nalebuff

c)      Market Mobs and Mayhem: A modern look at the Madness of Crowds by Robert Menschel

15)  See themselves as money makers

16)  Practice reading the right side of the chart and not the left

17)  Have an edge in the market

a)      An edge is what makes you feel that gives you a greater than 50:50 chance of determining the future direction of price

18)  Determine position size based on risk, not round number

19)  Buy strong markets and sell weak markets

a)      Trade on a chart that is clear, if not clear, stay out

20)  Play the reaction, not the news


Author: Anonymous

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