10 habits of a Good Trader

[wildchild]

Hello, friends! Today I want to talk about the next... Any trader should have a good trading plan. Do you stick to the well-thought-out trading plan? What habits (and how many) help you to avoid losses and to be disciplined in this uneasy business?

Put a good money management plan to work. Its key.

 

[Overnight]

...Business is like, don't spend more than you make, be focused, stick to your plan (which has to make money)...
...being focused on your work, having the right technology, continually learning, etc.

It constantly amazes me how people don't understand this.

Bang on, right there. Kudos, Mr. IronFist!

 

[Cprice253]

What profitability comes down to is having a good system. I doubt there are a million ways to make money by the markets.

Most of the strategies don't work. It's like they used to say in martial arts, it's not the art, it's the person. Except it is the art, and mixed martial arts competitions determined which ones were best. Brazilian jujitsu and muay thai consistently won. Kung fu? Lost. Tae Kwon Do? Lost. Aikido? Lost. Kung fu? Lost. Savate? Lost. Hapkido? Lost. Then, applying your concept, it must be that the right people happened to train BJJ and MT because there are so many martial arts out there and every one can win. Those same people would not have been victorious if they had studied karate, or kung fu, or tae kwon do, or aikido, or savate, or hapkido, because the techniques are different. They were battling the best people in the world. They need the best techniques.

For someone who is trading, they are struggling against the best people in the world. You need a profitable system. Saying any system can be profitable when you are competing against the best in the field is just as much nonsense as saying any style can be victorious when you are battling elite opponents. I'm sure MACD would work if everyone trading was a fool and you didn't have people with better skills and tools spoofing everything. Clearly, it takes the right kind of person studying the right art, like with trading it takes the right kind of person, and that person needs the right system. I am amused by these threads that so casually suggest that it's easy to make money with any system. The concern must be that all the traders out there don't have the right psychology for it.

Not making money has very little to do with any business aspect of trading. It has to do with not having a useful method. Business is like, don't spend more than you make, be focused, stick to your plan (which has to make money), buy a good computer, make sure you have a way to start orders if your internet goes down. These threads are like the kind of mood lifting nonsense you read in making money books. It's full of stuff suggesting that it's easy but you're never given a method that works and if you are given a method, it doesn't work, but that's never mentioned and you are given a big list of reasons to keep you occupied rather than looking at the system.

Here let me state it plainly.

The most important factor in trading is having a good system. Not having this, it does not matter what else you do because you will not make money.

Second is being able to follow the system.

Third is all the other stuff, like being focused on your work, having the right technology, continually learning, etc.

It constantly amazes me how people don't understand this.

@IronFist

You make a good point and I do agree with you, and want to add that my statement of there being a million ways to make money was quite ludicrous. On your ranking of what is most important, I believe that all three should be on the list, but that for some traders it may be that having a good system, being able to follow it, and being psychologically fit all are a equally important. It may not be as absolute as you state it is. Now again, I am not saying you are incorrect, I am suggesting that there could be a complex that exists in which the multiple aspects of trading you have ranked are important to the same degree as one another.

What if I was a new trader, and was given a rock solid, back-tested and proven profitable strategy but did not understand the importance of following the system, managing my positions/money, nor aware of the different emotions and other psychological shocks I may encounter.

Or if I was a new trader, and was taught all about the best money management and psychological approaches know within the trading arena, but was given a shoddy system that had a negative expectancy.

I don't know, maybe an individuals disposition to this situation depends on their personal experience with the market, and what they personally feel has helped or hindered them most in the market.