1. Winning Attitude

Every successful trader possesses this one key element. And it is this desire to become successful that will make you truly focused on trading. You have to understand that trading is a psychological process; you must be able to overcome challenges to becoming a great trader, because winning or losing depends largely on your mindset.

2. Discipline

Always Plan Your Trade And Trade Your Plan

A disciplined trader always has a plan about how to approach the market. Even before a trade is placed all the components have been predetermined. This will help eliminate any indecision involved with trading.

Always Trade With The Trend

Remember this important point ever time you make a trade.

Be Patient When Timing Your Entry

Regardless what your entry rules are, be specific and predetermined. Execute your orders only when all conditions are met. Note: Never open a trade because you are anxious from waiting.

Determine Your Exit Strategy

The method you use is not important, but the fact that you have an exit strategy is. This should have been predetermined in your trade plan and always execute without hesitation.

Execution Of Trade Plan

The execution of a trade plan should be simple. All the components prior to entering a trade have been predetermined. The important thing to remember is follow through with your plan and not let outside factors influence your trading decision. It would not make any sense to have a good trade strategy and not use it or change it in the process. Stick to the plan, which is the main reason you have one in the first place.

Consistency Is Key

Every trade should be consistent and implemented with ease according to the trading plan. This will help you become more proficient in trading. The key is to find a trade strategy that compliments you and has brought you success over time.

Simplicity

Always keep your trades simple and do not implement multiple strategies at once, this will only confuse you when tracking the progress of your trades. What you want to avoid is getting out of trade wrong as a result of complicated trading. So keep it simple and let your trading plan do the work for you.

3. Trade Management

Risk Management – Aggressive investors allocate no more than 30% of risk capital into the market at any one given time, but this might not apply to your style of trading. Understand for yourself what amount of risk is acceptable to you ever time you enter the market. A good rule of thumb is to risk no more than 10% of your investment capital at any given time. This will allow you to have room for error and still recover your loss on the next trade. Note: Losing a large percentage of your trading account can keep you from trading effectively; so do not overtrade your account.

Cut Your Losses Short And Let Your Profits Run

Cutting your losses short means sticking to the plan and having protective stops in place (Remember, your exit strategy). If the market is not going your way and you are stopped out, that is okay. Stops are meant to be hit and keep you from losing any more than your predetermined amount.

On your profitable trades, look to ride out the trend for as long as you can once you have set your stops to breakeven. And along the way use trailing stops to lock in more profits.

4. Avoiding Trading Errors

Blind Man’s Advice

Every trader has a different approach to the market. Do not let outside sources influence the way you trade. The last thing you want to do is make a trade based on a “guess or hunch” by another person who took another person’s advice. You get the picture right!

Not Following Your Trading Plan

Instead of following the blind, do your homework and have your own trading plan. Win or lose you gain two valuable things: 1. You will have gained the experience to become a better trader and 2. Once you become successful at it, no one can change that.

Trading On Emotions

Do not let fear, greed or hope ever get in the way of your trades. Emotional trading eventually leads to poor performance and high stress. Your trade plan if executed accordingly will help you control these variables.

5. Practice, Practice, Practice

A lack of experience in the market place will lead to losses, and it is recommended to first demo trade and practice implementing and executing a trading plan. The practice will greatly help with discipline and avoiding any trading errors.

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Good Luck Traders!