There are different strategies for value, growth, momentum, short selling, etc. First Find one that fits your personality and do your best to master it. The fastest way to learn is to study success. In other words, find one who is successful at the strategy, and then simulate them with your style. Another key is to recognize when the market environment is not favorable to your strategy and make the proper adjustments.
If you don’t have confidence, you have little chance of succeeding. This does not just apply to trading; it applies to EVERYTHING in life (business, relationships, athletics, etc.). With regards to trading, you have to believe in what you are doing and not be afraid to make misconceptions. The key is to learn from them, make improvements and constantly evaluate your progress.
There are so many various trading vehicles, like most things in life it is better to be the master of one than a jack of all trades across many different trading vehicles. We are FOREX traders.
KNOW YOUR TIME FRAME
You must find a timeframe that fits your personality. If you are too nervous, maybe short-term trading is not for you. Everyone wants to make tons of money in the market quick, but keep in mind that is not a healthy approach. Most people with this mindset tend to be “boom and bust” traders. They make a bundle of money and eventually blow up. If you are truly enthusiastic about trading and hope to be in a game for a long time I recommend focusing on a slow and steady approach.
ABILITY TO MAKE DECISIONS
If you go to McDonald’s, stare at the menu for 10 minutes and still can’t choose what to order then you have NO shot as a trader. You HAVE to be able to make decisions. You can’t wait for all the time and trade with fear. Who is cares if you make a wrong decision, just MAKE ONE!!! If you are wrong, you will learn from it and make a better decision next time. As a motivational speaker would say “Good decisions come from experience, and experience comes from wrong decisions.” The solution is that stop trading with fears and MAKE a decision. Who knows? You might end up making the correct choice, which will increase your confidence and enhance your ability to make sound decisions in the future.
It is similar to confidence, but what I am referring to especially is to have confidence in your ideas. It surprises me how many people will buy a stock just because someone on TV or Twitter mentions it. Don’t get me wrong I love to listen to ideas, but it has to fit on my strategy for me to buy it. Same thing suits when someone says something negative about a trade you are in. Don’t be so quickly swayed or talked out of your positions. Have conviction and let the MARKET prove you right or wrong! If you did your research to enter the trade and if nothing has fundamentally changed to stick with it.
ABILITY TO CUT LOSSES
I’ve examined the best traders in history, and they all have the same rules: CUT YOUR LOSSES! As a Trader, think of your cash as inventory. If you can’t cut losses quickly, eventually they get bigger and higher, and you will have no inventory left to work with. I have a strong confidence in my ideas, but when the MARKET proves me a wrong, I let go of my ego, cut my losses and move on.