Mastering fundamental and technical skills of trading appears to be quite easy to most people when compared with mastering the mindset of successful trading. Let us examine some of the traits that make a person a successful trader. They are in no particular order.
Have clear trading objectives. Do not just throw money at short-term trades and sit back expecting to ‘make it rich’. Map out exactly how much of your total investment capital you will risk in short-term strategies and spread that risk over many different trades instead of ‘putting it all on red’.
After setting your objectives, believe you can achieve them. If you don’t believe in your plan, how can you possibly expect to have that plan succeed for you?
Prepare plan for each trade before the market is open. Always do you analysis and map out entry and exit points when the market is closed. If you try to jump on ‘hot stocks’ during the trading day, you are not a short-term trader, you have become a day trader. Day traders must operate under much different rules, so it is best for most of us to stick to well planned short-term trades.
Regularly review your trades. Pick them apart, both good and bad. Look for what could have been done to make the trade better. Honest self- evaluation is the single best way to improve your performance.
Focus on the positive, but deal quickly and correctly with the negative. Do not dwell on your mistakes, but do not gloss them over either. Have a fair and balanced view of how you are performing and keep a positive attitude to keep yourself on track.