Do you have habits that help you in trading stocks?
There is no secret formula in becoming successful trader, but many often have certain habits in common.
Here are six habits of successful traders that you can adopt today:
Top traders are extremely driven, and their goals fuel their drive. Goals are vital to becoming successful in anything in life. Most successful traders have very specific goals. By making realistic and obtainable goals, you will become consistent and find yourself slowly becoming more profitable as time goes on.
Set one main goal for yourself, and create steps on how you will achieve this main goal. The steps along the way cause also be considered mini goals, so you will always feel like you will be accomplishing something along the way. And always, always put your goals in writing.
Wake up early.
The early bird gets the worm.
Waking up early is important because it can help give you time to collect yourself and prepare for the trading day ahead. Pre-market hours are super important and can provide you with vital information on how certain stocks and the market is going to react at opening bell and even throughout the day. You also need to wake up early to read all the important news from around the markets, so once the morning bell rings, you will be organized, and can focus strictly on the right stocks to trade.
Always be learning.
Successful traders never stop learning, they are committed to self-improvement. You will never learn everything about the stock market and trading, because the stock market, and economy, and market conditions are always changing. There are also new companies always forming with new technologies, so there is no way that a trader will ever know everything there is to know. You should always be willing to learn whether it is from blogs, the news, or even fellow traders. Remember, never underestimate anyone, you would be surprised what you can learn from somebody who is a lot younger and fresh out of the gate.
You can never do too much research on a company or a stock. If you are thinking about entering a trade, study the chart and find patterns, so you can get to know the stock and become familiar with it. Always do research on the sector also and see what other stocks that conduct similar business are doing, because a lot of the time stocks will move in a similar pattern, this is called correlated. Research the company, and look for potential catalysts that could be affecting the stock price, such as a new contract, earnings reports, or a new product release. By making research a regular habit, you can gain a better grasp and become more successful.
Most successful traders have a habit of tracking their trades, and all major hedge funds and brokers always track their trades. If the big boys and professionals are making this mandatory for their traders, then you should make it mandatory too.
Maintaining a trading journal is way to monitor your progress as a day trader, you should note setups, and what made you look at the trade in the beginning, such as catalysts.
Over time, your tracking information can prove invaluable in helping you progress further in your trading career. You can start to recognize trends in the setups that have been profitable — and notice when a stock is about to become a loser.
Make trading plans.
Making a plan and sticking to it is the most important habit of any successful trader. The main thing that gets in the way and why many traders fail to follow their plans is because of emotions. Once you are able to control your emotions you will be able to follow your trading plan, and will be on your way to becoming a successful trader. Also, by making a plan before hand, you will be able to have it in your head that you have to follow through with your plan, so you don’t all of a sudden make an emotional decision.