The Mindset Of A Successful Trader
This article is specially dedicated to my fellow Freely graduates as well as those who work and trade closely with me. Thank you all for being there for me.
Everyone who gets into trading, be it CFD, currency, options, futures or commodities, is looking to make a fortune in the shortest period of time. Few of them would achieve what they want with much perseverance but sadly, majority of them don’t, statistically. Most of them actually fail miserably or give up too quickly.
So, what separates the trader who makes it big from those that failed?
Well, for me, it’s all about the mindset that you take and the willpower that you exude. These people who make it big have an undeniable confidence in themselves and are supremely confident in their own abilities and the strategies that they are deploying.
When this confidence is shaken and they are down, they exude their willpower and get back on the horse and ride harder towards their goals than ever and with more resolve than ever! I do have losing trades but so what? As long as you know and believe in what you are doing, you will be handsomely rewarded.
You see, successful traders are not afraid of taking trading chances. Life is about risk and sometimes you have to take chances in order to be successful. If you want to be a successful trader, you got to learn to take chances. That doesn’t mean that you’re going to be reckless, but take calculated risks instead.
Was there risk involved for Warren Buffett in buying up Coca Cola, General Electric when they initially started up? Sure, people are taking a big risk by opening a business. A lot, of bad things can happen, but a lot of good things could happen as well, right? Think about it.
Successful traders always have the end in mind when they are beginning. They not only have their profit target in place, but also a detail trading plan summarizing all the exit point and conversion strategies should something goes wrong.
Too many people get in to trading with aspirations of making all of their dreams come true, but few ever have a general trading plan to make this happen. They don’t take the time to sit down and think out a plan for themselves as a trader. They depend on other people to provide them with tips and information. Would these people make it big at the end of the day? You tell me and if you are one of them, shame on you as a trader.
In order for you to eliminate your greatest enemy in trading, you have to formulate a trading plan, take action and don’t look back. Focus on your plan and don’t get distracted. That is a tough thing to do especially on these few weeks where the market is extremely volatile but if you have a proper trading plan in place, I guarantee you that you will be well taken care of if you are disciplined enough to react according to your trading plan.
Tag:full time trading, stock trading, successful trader, trader, trading mindset, trading psychology, Warren BuffettPopularity: 61% [?]
Hi Wei Ping :
Nice article.
Just wish to add that even with a trading plan, it’s also important to reinforce the following :
1) Stick to your money management rule no matter how confident you are of your trading plan or how in the past such signals have “predicted” the anticipated stock reactions correctly 99 times.
2) If you cannot make a quick decision based on the signals according to your trading plan, reflect upon whether you have spent enough time & efforts applying your trading plan and constantly refer it back to the past winning trades to see what prompted you to make an entry in the past. Paper trade to build up your familiarity of your trading plan if necessary.
3) Study winning trades by other successful fellow traders and learn how they have achieved them. Most successful traders only study a handful of stocks and monitor their price movement and development for years so that they could anticipate their price action more accurately.
Yours Truly,
Tony Chai
Hi Tony,
Good point. You may visit http://www.leongweiping.com/category/trading-excellence/ for more articles on money management and trading psychology.
Tony is my fellow Freely graduates where he blogs about his trades at http://options4u.blogspot.com. Very inspiring site. Do pay him a visit there..
Hi Leong,
Thanks for sharing.
Think Tony is absolutely right about Money Management.
You can have the best strategy in the world, and if it is does not go as planned…. then you’re almost doomed!
So the best foundation is still money management and the rest of the finer ingredients… belief, desire to be successful etc. counts!!!
Happy trading!
Clarence,
Thank you for passing by. It’s always great to see you around, knowing that you have successfully evolved to be a profitable options trader. I’m proud of you.
Money management is always important and that’s the main thing i always talk about if you know me well enough. In fact, money management is the ONLY secret that successful traders become profitable. But do take note also that having the correct mindset determines the level that you are going to be. Yes, you can make it there with proper money management but in order for you to be on the top, correct mindset always come first.
Losing trades can always be salvaged if it goes the other way round if you know options enough, not necessary conversion but being flexible enough. ;0)
Yes, flexibility is the keyword and it’s up to your imagination to think on what I meant.
I talked about money management as well at http://www.leongweiping.com/8/money-management/
Thanks for sharing your mindset, WeiPing.
What we think is what we get.
“Our THOUGHTS = Our DESTINY”
Billy,
Glad to see you here.
Yes, you are right. We become what we think about. Thank you for sharing as well.
Dear Wei Ping, Great article on trading.
My question is, is it really possible to trade options for a living? By that, I mean replicating full time employment income through options trading (not as a supplement income). Do you know of any one in Singapore who does that?
Hi Wan Choon,
Thanks for your visit.
Honestly speaking, I do not know anyone in Singapore who trade options full time for a living. However, I have been trading options for 2 years without a job and all of my living expenses are funded by my options income.
Anyway, I still do not call myself a full time trader officially due to certain “technical” implication. Perhaps they don’t call themselves full time due to the same implication. Who knows!
If you ask me whether it is possible to trade options full time, I would say yes as everything to me is possible, it’s just a matter of flexibility, creativity and of course, strategies.
To be honest with you, I see too many who had gone full time have reverted back to their full time job, which they simply don’t like. They have chosen to give up but I choose to persevere and that’s make me where I am today. Persevere with a little bit of flexibility will do the trick.
Hope I answered your question.
Thanks for sharing these information. Article looks professional.
Keeyit,
Thanks for your comment.
Hi Wei Ping! That is a great article!
Good money management, correct mindset, with proper planning and preserverance is indeed the most important ingredients towards being a successful trader.
Terence,
Thank you for passing by. I always believe that is the essence of trading for long term.
Cheers!
Wow Ping Ping you had it going for this mindset thingy, well articulated and thoughtful indeed.
To your success Bro
Hello Zand bro,
WA is always different without you around. Thank you for passing by.
Zand is a professional forex trader and you can pay him a visit at www.zandtenn.com for more forex insights.
Hi Wei Ping,
I’m a newbie to options trading and latest batch of Freely graduate as well, and this article has motivate me a lot and i totally agree with you.
There’s a lot things to learn along the way and same thing i believe in the correct mindset.
Thomas
Thomas,
Glad you like the article. I will come out with more next time, ok? Stay tune!