What makes a good investor / trader. The simple and short answer is discipline, dedication, the ability to follow rules and above all “a positive outlook on their lives and the markets”.
If we break them down and start off with discipline. What do I mean by discipline, well! it’s the ability to implement risk management within your own risk bubble consistently, is the antipathy of discipline. It’s not the losing trades that finish off traders, it’s going outside of their risk bubble and losing more than they can handle that finishes off traders.
Dedication. Most people just don’t have the dedication to really get to grips with trading and investing. Most people are looking for the first opportunity to say, well I tried but it didn’t work. I gave it my best shot but this wasn’t right for me or it was their fault, it wasn’t mine. The real reason is that most people don’t have the dedication to see it through. The only way anyone can truly fail, is the day they finally give up. If they don’t ever give up then they have never failed and there is always the potential to achieve the goals they have set for themselves.
The ability to follow instructions and trade within a predefined set of rules. Moving stop losses because they believe they are right. Taking profits too early only to see the the investment / trade go and hit their target. Failing to take the set up when the perfect set up is right in front of them, this one is probably the most common. If your rules tell you to do XY and Z when this happens then do it.
PMA Positive Mental Attitude
Positive mental attitude or a positive mindset is so crucial in the markets and in life. You have to see the best in everything otherwise you just walk around in a constant state of misery. If you have a position, what can you learn from it? Examine the process, and discuss it with your mentor. Does it fit within your rules? If there was a mistake, learn from it so you won’t make the same mistake again. You have just turned a negative into a huge positive. When you have a profitable week or a month, treat yourself to reinforce the good habits, providing you were profitable using good habits. Read such books as Jesse Livermore, Reminiscence of a stock operator or any of the Jack Schwager Market Wizard books. These books will show you that even the top boys experience the highs and lows, but they stay focused and kept a positive mind and as a result, they became very wealthy.
The books mentioned are available for download as audible for those of you who are not big readers. These books will enhance your knowledge of the markets and give you a better understanding no matter what level you are at.
Hope you have an amazing day.