18 Habits of Rich Traders

Trading in the stock market is like being in a Monopoly game. If there are ten people playing, one person is likely to take everyone else’s money.

Trading functions much the same way, with 10% of traders becoming profitable, while the other 90% lose or break even. After studying successful traders like Livermore, Darvas, O’Neil, Covel, and Jack Schwager for many years, I have compiled a list of what separates them and their followers from the 90% that come up short. To check my own accuracy, I sent these principles to John Boik, Alexander Elder, and Chris Kacher and many others.  After receiving their support, I am happy to share these shortcuts to trading success.

Psychology

• New Traders are greedy and have unrealistic expectations. Rich Traders are realistic about their returns.
• New Traders make the wrong decisions due to stress. Rich Traders can manage stress.
• New Traders are impatient and look for constant action. Rich Traders are patient.
• New Traders trade because they are influenced by emotion. Good Traders use a trading plan.
• New Traders think they can stop learning. Rich Traders never stop learning about the market.

Risk

• New Traders act like gamblers. Rich Traders operate like a businessperson.
• New Traders bet the farm. Rich Traders carefully control trading size.
• For New Traders outsized profits are the #1 priority. Rich Traders know that managing risk is the #1 Priority.
• New Traders try to prove they are right. Rich Traders admit when they are wrong.
• New Traders give back profits by not having an exit strategy. Rich Traders lock in profits while they are there.

Methodology

• New Traders give up. Rich Traders persevere until they are successful.
• New Traders hop from system to system when they lose. Rich Traders stick with a winning system even when it is losing.
• New Traders place trades based on opinions. Rich Traders place trades based on probabilities.
• New Traders try to predict. Rich Traders follow what the market is telling them.
• New Traders trade against the trend. Rich Traders follow the market trends.
• New Traders follow their emotions to their disadvantage. Rich Traders follow systems that give them an advantage.
• New Traders do not know when to cut losses or lock in gains. Rich Traders have an exit plan.
• New Traders cut profits short and let losses run. Rich Traders let profits run and cut losses short.

Source: www.newtrader.com