20 Differences Between Successful & Unsuccessful Traders

Beliefs of Successful Traders vs. Unsuccessful Traders

What separates a long-term successful trader/investor from an unsuccessful one?   One of the main components is "mental game", as well as being systematic and organized.   These are some of the traits and practices that I've found are in line with success:

Mindset and Practices of Successful Traders:

The markets provide an opportunity

The markets exist to give me profits

If I get stopped out then I have to reevaluate the trade

If the market doesn't do what I expect then I must reconsider

I'll take one trade at a time

I don't have to be perfect, I just have to do my best.

Money is not that important

Losing is part of the process of making money

Trading is a game, I know I can win

Every setback provides me with new market information

I can wait for an opportunity to come

Get pleasure from trading the market as an end in itself

Not motivated primarily by money

Confident that they can make money in the market

Not afraid to take a loss

Patient - waits for opportunities

Uses a highly planned strategy

Is well prepared, done his/her homework

Measures the risk/reward ratio of every trade

Mindset and Practices of Unsuccessful Traders:

I must be in the market now

If I lose on this trade I am a loser

If I wait for my trading rules I'll miss out

If I get stopped out I have bad luck

I can't lose money

The market makers got me again

I'm an idiot, how could I lose money

What will they think when I tell them I lost money on this one?

The stock market is rigged

It's impossible to get a good fill

I cannot take a loss

If I take my profit then I am right

Never define a loss

Locked into a narrow belief system

Hesitate to make a trade

Do not stick to a system

Trade by emotion

Have no consistent strategy

Do not practice risk management

More interested in proving themselves right then being a success

Bottom Line:

Strive to put your trading/investing mindset into the first group of attitudes, and eliminate thoughts/beliefs from the second group.  Shake off your bad trades and learn from them. 

A bad trade/investment does not make you a bad person, just as a winning trade does not make you infallible.  Constantly keep improving, both as a trader and a person.

Trade Well!

Price Headley.