3. Stay focused
To become a good trader, you need to make a lot of changes. Developing good habits is very important in trading or else you might just get left behind. There are some specific habits that you need to develop and these will change the way you trade.
What are habits?
Habits are activities that we humans perform repeatedly that happen unconsciously. It could be a set way of thinking, doing something, saying something, feeling something.
These habits have become so ingrained in our mind and we have associated certain things in our lives with those, we perform these habits when and when we are in that particular situation.
We have developed and owned certain ways of doing things in life. These will differ from situation to situation. In trading too, traders develop certain habits that they perform.
These habits could be performed consciously or unconsciously.
Now habits could be either good or bad. There are actions that we perform unconsciously but actually, sabotage us while they may also be actions that we perform that are beneficial for us.
In this business of trading, traders have to inculcate certain habits that will help elevate their trading journey and improve their results. Let’s discuss such essential habits.
1. Keep emotions at home
This is one of the best things that traders can do and must do whenever they begin their day to trade.
Emotions have no place in trading and decisions taken by the influence of the emotions are most probably going to be poor ones.
Traders might not even be aware that the decisions they make are because of their emotions playing out.
Things like panicking when trades move against the trader, taking a trade based on a feeling that price will move one way, closing trades before the take profit level fearing that price may reverse, etc, are all influenced by emotions.
Traders are humans after all and they do take decisions based on emotions in life, but it is essential that they learn to keep their emotions at home when they indulge in trading activities.
2. Keep track of everything you do
Everything that a trader does has some or the another effect on the trades. Hence, it becomes essential to keep track of everything.
How the trader identified the trade, details of the trades, how did he react during the trades, how does he rates the trades irrespective of the outcomes, etc, are some things that the traders can keep track of.
Keeping track of everything will allow the trader to identify any shortcomings. Traders will have all the information for scrutiny and can decide the areas that they can work on.
Keeping track of things should be a habit because traders do not look upon it as something essential and not many traders actually perform this.
I would suggest that traders record everything in their journal at the end of their trading sessions and then reflect upon it before the end of the day.
Performing this day in and day out and will become a habit eventually. I believe that this little thing will result in instant positives.
3. Stay focused
The business of trading is very exhausting and taxing and only those sustain that have the grit and determination for it.
It is very easy to lose focus of the goal and bail out midway. When things don’t go our way we look for the easy way out and quit. But this shouldn’t be the case with trading.
Instead of looking at roadblocks in trading as setbacks, traders should look at them as challenges or levels they must overcome to achieve greatness.
Staying focused could also be associated with the confidence one has in the work. Having confidence in what you do will automatically result in you being focused on the journey and sticking to your plan at all times.
One widely followed method to stay focused is by meditating, it allows one to clear the mind of all distractions and to channel the attention to the things that matter.
Each trader will have his own way to stay focused and it is important that you find your way. Making staying focused a habit will allow you to do away with short-term setbacks and keep going.
4. Don’t keep money at the highest pedestal
We are all humans and we have our needs. Needs could be of various types and almost all our needs can be fulfilled by money. So money is something that is kept at the highest pedestal by many individuals.
If you are into trading and have some deep connection with money then things could become difficult for you.
Traders would often judge their trading journey on the basis of the money they made or would even get into a state of panic if they experienced a drawdown period in trading.
Having this emotional connection with money is not something traders must have. It is not bad to want money but what’s bad is to only focus on it and chase it irrespective of everything else.
One way to avoid keeping money at the highest pedestal is by looking at it as a byproduct of trading. The primary thing should be the freedom it brings and the positive changes it brings in the character and personality.
5. Maintain a good personal life
Every time you trade, you are expected to be in the best shape of mind. You are expected to give your complete attention to the trading process.
Having things in your personal life that takes up mental space will make the trading journey a tad bit difficult.
It can lead to you losing focus in the process and end up taking irrational and poor decisions. Hence, it is important to have a good personal life.
Life is not static but is dynamic, every now and then things keep happening in our lives that can be good or bad. In times when our personal life is not at its best, it is essential to keep all that at the bay when trading.
We do not want to mess up good opportunities due to direct shortcomings on our part.
You might have a question about how can this be a habit, but believe us or not but there are things that we do every day that dictates the peace of our life.
It is essential to identify these and only perform those things that maintain peace and tranquility in life.
6. Don’t be stubborn
Traders are not always going to succeed in the decisions that they take and will every now and then be proved wrong.
We take numerous trades in our trading journey and it is highly possible that we will lose money in quite a lot of trades.
In such cases, traders will not accept that they have just been wrong but will ponder over it. This will lead to them trying to focus on the losing trades more than focusing and preparing for the next trade.
By being stubborn, traders are simply self-sabotaging.
If you have a plan that has been tested well enough and has had good results for you to take trades based on it then all you have to do is to trust the system and let the probabilities play out.
You will be proven wrong in the markets from time to time and this is not something unusual. Do not be stubborn and fail to accept a loss. Losses are a part of the game and are just a short-term affair.
Trading is a long-term game and traders must focus on sustaining and staying in it for the long term.
7. Be honest with yourself
By being honest we mean that you should have realistic expectations from the markets.
It is very common for traders to have high expectations from trading and they look upon it as a means to get rich and successful quickly.
All that we would say to this is that be honest to yourself. Do not pressurize yourself by setting overly high expectations that are not practical.
By doing so, you will become prone to losses as in order to meet the expectations you will end up taking a higher risk and making poor decisions.
I have said this many times and will say it again, trading is a long-term business of accumulating short-term profits. Staying and sustaining in this business is not for everyone.
Make it a habit to have little to no expectations from the markets. Even before you put on a trade, think that this trade will be a loss and that you are simply following the system you have developed.
By expecting the least, you will not be tempted by the profits you make and will not end up having huge impractical expectations from the markets.
8. Never stop learning
Traders are never going to reach the point where they can say that they have mastered the markets and that they know exactly how the markets will behave each time.
We are always going to be students of the markets and throughout our trading journey, we will get to learn loads of things at each step.
This learning might not just be from the markets but also from other fellow traders. These traders could be experienced ones or even the new ones that are just starting out.
Each trader is built differently and it is highly possible that different traders see different things in the markets.
Hence, it is very important to have the habit of being available and open to learning from all possible ways and to never close the channels for knowledge.
Staying in the hunt for new knowledge will help keep you ahead in the game and give you the edges in the market that will allow you to capitalize in various ways.
9. Do not be selfish
It is often seen that traders that are able to profit in the markets by certain strategies that they have developed, tend to keep the strategy and their methods a secret and do not share it with others.
This is one bad habit that traders have and it is quite important to avoid being selfish.
Helping others out in their trading journey can do a lot for you too. By teaching others, you could learn many new things from them and can even learn ways to improve upon your systems too.
By staying selfish and not sharing your knowledge with others will only make you a paranoid person.
You will start looking at everyone as your competitor and will end up competing for even the smallest of things.
On the other hand, if you open yourself to imparting knowledge to others you will open yourself to a number of possibilities.
Like I mentioned about always being on the hunt for new knowledge, traders must also have the habit of giving away knowledge.
10. Show up every day without fail
The only thing that’s more unfortunate than a losing trade is to miss a winning trade.
Let’s assume that you have a well-tested system with a proper plan in place and manage risk each time, it is all a waste if you do not show up or arrive at your trading desk or sit at the charts daily.
We know that trading requires patience and persistence and at times trading could be tiring but if you do not show up daily to take trades then it just shows that you are not serious enough.
The traders that are considered to be successful have this habit of arriving day in and day out even if their system does not spot any trades.
This activity has become a part of their routine and they adhere to it strictly without fail.