Maybe you don’t like this stat, but it’s true that only 5% of traders do successful trading. Why only 5 to 10 percentage of traders are successful? And what are the secrets of trading which make them successful.
The goal of a successful trader is to make the best trades. Money is secondary.
– Alexander Elder
In this article you’ll learn more about the secrets of trading and some free bonuses that may help you in your trading journey.
KEY TAKEAWAYS
- Trading is a business, so you should have a proper trading business plan.
- The only holy grail system that exists in the market is a Trading Mindset.
- Doing nothing is the part of trading.
- Maintain your trading journal consistently.
Shall we get started?
1. Successful Traders have a Professional Trading Plan
“An idiot with a plan can beat a genius without a plan”.
– Warren Buffett.
A complete decision-making tool for your trading activity is a trading plan. It assists you in selecting the right trades, timing, and quantity. It should be unique to you. You can use someone else’s strategy as a guide, however, keep in mind that someone else’s attitude toward risk and the amount of capital available may be very different from yours.
Get your free professional trading plan template:
2. The Holy Grail System in successful trading
In the market, the holy grail system is a “Trading Mindset“. You heard somewhere that “80% of the trading mindset and 20% of the strategies matter.” Yes, It’s true and add on the above line, only 10% to 20% people work on trading mindset. Successful Traders consistently work on the mindset part. However, they prioritize mindset than skillset.
A trading mindset tells you how you respond to profits and losses during market hours. Whether you are more excited about profits or more panicked about losses. A trader’s mindset should be similar to the mindset of a casino dealer. The casino dealer never shows any expressions and keeps their temperament cool & calm.
3. Secret of trading is Trading Discipline
Discipline is the bridge between goals and accomplishment.
– Jim Rohn
Trading discipline is simply an ability to stick with your trading plan.
Let’s understand with an example:
Your trading style is a swing and positional based on the “CUP PATTERN” setup.
As you all know every setup has a drawdown period. And you faced a series of losses.
So, now you have two choices, either quit this setup like most traders do or stick with it like a disciplined trader.
Discipline in life can affects in trading, so you’ve to be disciplined in your life to be a successful trader.
4. Consistency is the key in successful trading
“I fear not the man who has practiced 10,000 kicks once, but I fear the man who has practiced one kick 10,000 times.”
– Bruce Lee
The gap between amateur trader and successful trader is Consistency.
Most amateurs don’t focus on one trading setup for trades; they dabble in the setup. On the other side, successful traders consistently follow one setup until it becomes second nature. Consistency and trading discipline are hidden secrets of trading.
5 Secret: Low risk – High reward – High probability setup:
A successful trader looks for a trade with low risk, high reward, and high probability.
Firstly, identify the risk in the particular trade which we can control. And then check potential target. If the risk-to-reward ratio is 1:3, then this trade is the choice of a successful trader. And to increase your winning trades, utilize trailing stops when you can. Exit a trade when you have to, not just because you’re worried about your open profits.
6. The Trend is your Friend:
Successful traders always follow the line of least resistance- follow the trend- the trend is your friend.
– Jesse Livermore
Trend is the direction of a stock, either Up and Down or sideways. After the volume indicator, trend is the second most important tool that helps a technical trader.
If you want to be a successful trader, you should be friends with the trend.
7. Secret of trading is protect your profits
When there’s nothing to do, do nothing.
– Richard Weissman
Doing nothing is the part of trading. You may all experience that you made decent profits in trending markets and lost your profits in choppy or side ways markets.
Identify your own pattern, in which markets you under perform. Better is to stay away from market and wait for quality trades. And utilize time to sharpen the tool; means more learning, back testing, and work on mindset.
8. Secret: Learning is Earning
Warren Buffett reads 500 pages every day, and he is one of the most successful investors in history that’s why constant learning matters.
Try to spend at least one hour in learning; it including reading books and taking courses.
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9. Avoid Distraction:
Successful traders detach from the outside world by avoiding news and negativity. They focus on their trading system.
You are wondering!
Why is it so important?
The answer is, it may create doubt in your mind. For example:
You enter a stock with a long side trade according to your trading system. And you saw bad news about the stock. This may create doubt in your head during market hours. And the result, you may lose your confidence in that trade.
10. Maintain Trading journal:
A trading journal is one of the most effective tools for performance management. It is where you record and review daily trades for better output and future reference. A journal can help you track progress as well as study mistakes made when entering or exiting a trade. A trading journal is a necessary tool if you’re a technical trader.
Get your free template of trading journal:
Final thoughts about secrets of trading:
To become a successful trader you’ve to master all aspects of trading. You have the right method to trade, proper risk or money management and a rich trading mindset. Trading is all about mindset.
So, if you want to join the 5% club of successful traders then apply these secrets of trading in your trading career.
Thank You, I hope you’ve enjoyed this information as much as I loved writing it for you.
And give your valuable feedback about the information in this article.
Happy Trading!