So what can you do to become a more consistent trader and increase your profitability?
1. Think of trading as a business and have a trading plan.
2. Make sure that the strategies you select, match your personality so you can follow them.
3. Have a realistic expectation of what your returns are. Include all the costs associated with your trading business.
4. Have an idea for your risk/reward ratio. Don’t confuse trading with gambling. If you are increasing your position, make sure that your strategy warrants it.
5. Have trading rules and follow them. Think about them as contingency plans. Because when your emotions are very high, the tendency is that you make very poor decisions that can cost you your account!
6. Be flexible to the market conditions. When you see the market as it is, you have a much better chance of managing your portfolio and increasing your profits.
7. Take responsibility for your results. Taking responsibility does not mean that you have control of everything that happens. It means that you have a choice of how to react to the things that happen.
8. Find out why you are in the trading business. If it is for the excitement of it, find other hobbies or activities that you can get your excitement from.
9. Keep track of your performance. This is a way of objectively looking at how you are doing, what you did right and what you learned. Be gentle with yourself.
10. One of the most important things that people don’t handle is their Emotional Risk. When emotions run high, the quality of decisions goes down. It is very important to learn how to react to your emotions and thus increase your profits.
“I never hesitate to tell a man that I am bullish or bearish. But I do not tell people to buy or sell any particular stock. In a bear market all stocks go down and in a bull market they go up.”
But I’m talking about mistake. You’ve made a mistake. Now what?
Do you know why I’m talking about a mistake?
Anyone who has worked in an office for more than a day has made a mistake. While most people accept that slip-ups are unavoidable, no one likes to be responsible for them. The good news is that mistakes, even big ones, don’t have to leave a permanent mark on your career. In fact, most contribute to organizational and personal learning; they are an essential part of experimentation and a prerequisite for innovation. So don’t worry: if you’ve made a mistake at work, — and, again, who hasn’t? — You can recover gracefully and use the experience to learn and grow.
In regular life, mistake is common, but in Stock Market? There is no chance to make mistake. It’s very risky for your regular life. Don’t compare occurred mistake in stock market to regular life mistake. There is very big different. We can’t say “Man make mistake, we should to forgive it.”
Look forward and base decisions on the future, not the past. Translate a mistake into a valuable moment of leadership. “If you are going to pay the price for making the mistake, you need to get the learning”
Here are a few guiding principles to help you turn your gaffes into gold:
– Fess up and acknowledge your mistake
– Change your ways
– Rely on your support network
– Get back out there
– Not all mistakes are created equal
Principles to Remember:
• Accept responsibility for your role in the mistake
• Show that you’ve learned and will behave differently going forward
• Demonstrate that you can be trusted with equally important decisions in the future
• Be defensive or blame others
• Make mistakes that violate people’s trust — these are the toughest to recover from
• Stop experimenting or hold back because of a misstep
If you think of your trading as a hobby, then you produce the results of the hobby and making money becomes secondary.
For your trading to be successful, it is imperative to create a proven process to make it a success.
2. Have a written plan that matches who you are
This is a very important step. We want to have a proven plan that succeeds. However, if it does not match who you are, you are setting yourself up for failure. It will work for a while, but because it goes against who you are, after awhile you find reasons not to follow it.
3. Have a money management system in place
When you have a system in place, it enables you to manage your risk better thus allowing you to preserve and grow your capital on a more consistent basis.
4. Create your own daily routine
when you get up, you follow certain routines. create one that serves you and sets you up to make money consistently.
5. Be patient
If you are looking for excitement, find a hobby that can provide you the excitement.
This is one of the most important skills of your trading success.
6. Don’t focus on the money
You need to detach yourself from the result of your trade. This does not mean that you don’t care. Of course you do, and that is why you have placed your trade.
7. Develop your Mental Edge
Stephen Covey has a 90-10 principle. He mentions that 10% of your life is determined by what happens to you. 90% of life is decided by how you react.
Events happen to us. What differentiates the super stars is how they react!