On many levels, stock trading is all about being positive – positive about the market and your own strategies. Sadly, even with this being an important key for success, many new traders not only are devoid of it but they also completely overlook this aspect. Read more
Stock trading is all about minimizing risks – using right strategies – to optimize the returns. It’s a game not for daredevils who are always on the go to take big risks but for smart individuals who are calculative in their overall approach.
In short, risk management is a key to become a success trader. Of course, it’s an art that doesn’t come naturally. It needs to be learned, tested and learned better.
“The stock market is a device for transferring money from the impatient to the patient,” said Warren Buffet. And given his remarkable experience and portfolio, very few could really question his ideas and opinions.
Indeed when looked at the stories of all the successful stock traders, one could easily outline the subtle (but very important) truth that lies way behind the mainstream perception of extraordinary financial and technical knowledge. One of the biggest factors behind the high-flights of these individuals isn’t what they know—it’s their patience.
“Don’t get carried away… it will come down.”
Down the line, when new traders find their comfort with the market basics, they are supposedly given a rule that follows a law that of Physics—what goes up must come down.
Stock that goes up must come down, says and believes many.
While a decade back the theory had less contention, not today. With the surge of analytical tools and technologies, more and more figures have surfaced to prove that this is simply a myth based out of someone’s “practicality” and “safe playing”.
“I don’t know how to do it…”
However urgent or rewarding the next step is, as humans, we never run out of reasons. We know stock trading is one of the best investment avenues and it vouches big rewards. Sadly, majority of people obstruct this journey from the go, claiming they don’t know how to trade. This lack of confidence and reluctance to learn comes from the well-conformed myth that you must be a genius to be an ace trader.
“I don’t want to invest in the stock market, it’s too risky!!!”…. “Let’s make some quick money in the stock trading.”
These are two extreme-ended myths that, sadly, majority of people still believe to be true. In particular, the beginners, who either avoid trading because they know less or know too much to “hack” the system with super-human ability. Not that it’s a blatant lie—trading is risky and, on the other hand, it does offer big returns. But the notions that have shaped these narrations are totally wrong. They have spurred from the lack and inconsistency of the right information.
There are no hard-hitting rules to become a successful stock trader. However, there is a broad 3-step flow that the newbies must adapt to stay on the right track. It includes the right trading strategy, a money management plan and discipline.
Out of these, the middle one is the most overlooked. While people make strategies of how and when there are going to trade, and they also have a right mindset, few of them really care about having a thorough money management plan. And needless to say, it is one fatal mistake that stops them short from optimizing their returns.
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:
As human beings, we all want security. And this puts us off taking stock trading as a full-time profession. Filled with too much of fluctuations and uncertainties, only a handful of people dare to give up their safe jobs to venture this path. Even after so many years and countless success stories, still, trading is a “side income” for majority.
“It’s heaven, really. The rewards are seamless if you’re smart,” says a professional who trades full-time.
The idea – proliferated by countless books and articles – that successful traders are more intelligent and big risk-takers is nothing but completely flawed. And this fictitious belief is the first stumbling stone for the new traders on the path to higher returns. Many of them start their journey with certainty that they would need to be genius at the technical-end.
Are you new to trading? How are you trying to match (and learn from) the habits and lifestyle of successful traders?