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Here are 10 of the main differences between Successful and Unsuccessful Traders.
1- Cutting Losses
– The unsuccessful trader thinks – when in a losing trade – that the stock will come back, and
that he’s not losing money as long as he hasn’t closed his losing position
– The successful trader has no second thoughts about cutting his losses short. He learned the
hard way that the bigger the loss, the more difficult it is to come back from it. He also knows
that a “paper loss” is a very real loss
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6- Focusing on the Money
– the unsuccessful trader focuses on the money, hoping he will make a certain amount on this
or that trade so that he can make X amount of money, or buy his dream car.
– the successful trader knows that the market couldn’t care less about how much money he
needs to make. He knows that focusing on the money may cause him to neglect his entry/exit
rules so he focuses on the process instead, making sure he does not violate any of his rules. He
knows that since his strategy has a positive expectancy over a certain number of trades, by
focusing on the trading perfectly, the money will follow.
7- Steady Income
– the unsuccessful trader thinks he’ll be able to generate a steady monthly income from trading
and quit his job
– the successful trader evaluates his performance on a yearly basis, and knows that if he needs a
steady monthly income, he should get a regular job
8- Certainty VS probability
– the unsuccessful trader thinks that if he finds the perfect setup (chart
pattern/indicator/news), he’s sure to make money on a particular trade and he discards any
setup that didn’t work in the past
– the successful traders doesn’t give much importance to the outcome of one particular trade.
He knows that if over the long term, probabilities are in his favor, he will make money over time,
regardless of how many losing trades in a row he gets