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“One can have no smaller or greater mastery than mastery of oneself…” – Leonardo da Vinci
Fantasies are among the cheapest things in the world, since everyone fantasizes. Nevertheless, carrying out what you fantasize is sometimes not impossible, providing that it borders on reality. So realistic goals in trading are the objective plans that guide you as you journey towards financial freedom. When a trader does not know what she/he is doing, nothing will work for them. The message here is that you can achieve long term success with the most important aspect of trading – risk management and rock-solid discipline. Without this you cannot be a permanently victorious winner in the markets. Would you be amazed that we are serious about helping as many traders as we can to be the best traders they can be as they continue their journey to financial freedom? Trading principles that work are non-market specific. Read on this article as you’re exposed to more timeless traits of triumphant market wizards.
Traits of Successful Market Wizards
9. Victorious market wizards know that the markets will be there on Monday morning: When I was still a novice, it wasn’t uncommon for me to be dejected because I wasn’t online when a trading opportunity occurred. That was ludicrous. Victorious traders acknowledge that they don’t need to be trading every time. You might think that one trading setup is your last opportunity that mustn’t be missed. This is plainly farcical. There’ll be many opportunities to go long on the GBPUSD at 1.5600 or sell the EURGBP at 0.7900. You oughtn’t to punch your PC or break your android phone when you discover that you failed to notice a fabulous trading setup. You’ve to be grateful that your portfolio is safe. There will always be trading opportunities in a foreseeable future; even tomorrow. Be thankful if there’s no huge negativity on your portfolio (usually sustained from emotional trades). More speculation opportunities are coming your way. The markets will always be there on Monday morning.
10. Victorious market wizards honor their stop orders: When triumphant experts trade, they use hard stop loss orders, not imaginary stops. The issue of stops is controversial, and as a result of this, more articles would be written on this very topic in future. Stop loss must be respected; it mustn’t be widened under any circumstances. In the past, I declared without mincing words that trading without stops is one of the suicide trading techniques that would eventually lead to pecuniary ruin. Your stops are your life insurance policy in the markets. I’ll have to be blunt here: without judicious use of stop loss, it’s completely impossible to enjoy everlasting success in the markets. Success without stop loss order would eventually prove to be transient. It’s no wonder that some so-called market professionals of the past are no longer trading (they crashed and flopped). Taking one’s small loss and looking forward to the next trade is better than smarting and running to toilet now and then because of a negative trade that’s going protractedly against you. The probability that a negative trade would later go positive is only 50%. One who fails to close a small loss could be later forced to close a colossal loss. Great institutions, funds, and investment groups have collapsed or morbidly affected because their speculators failed to put and honor hard stops. Excessively huge position sizing and lack of stops are often the reason why so-called [rogue] traders ululate and wail like babies when the markets become precipitously irrational. A stock that has gone against you by 500 points could just be starting a 6000-point journey. The stock could even travel far farther than this and might not reach your entry price during your generation. Victorious market wizards always use stops, even if it sometimes appears daft to do so. They don’t also open additional trades in the losing direction.
11. Victorious market wizards do not feel a price is overbought or oversold: The price on the GBPCHF isn’t oversold at 1.5082 if bears will still prefer to short further at 1.5000. Market wizards do not buy because a market has fallen too much, or sell because a market has risen too much. Majority of speculators grapple forlornly with financial instruments as they’re looking for turning points in the markets. No matter the observation period preferred, majority of market speculators employ any chart analysis and analytical tools at their disposal to pinpoint expected reversal areas in the markets. Rather than going against the market because they thinks the price is too cheap or too expensive, victorious market wizards sell short when there’s a rally in a context of a downtrend or go long when prices are on sale in a context of an uptrend. Victorious market wizards wouldn’t look for reversal areas. They’d prefer the reversals to occur; thus get confirmed before they make their money somewhere in the middle of the new trend. They’d make sure that the newly formed bias has been confirmed, contrary to most speculators who look for reversals before they occur. Majority of speculators dread trading with the flow in overbought and oversold markets. A market bias is prone to hold its ground rather than capitulate, therefore is it sensible to trade against the flow, rather than go with the flow of the markets? However, this won’t prevent you from managing risk if there are eventual reversals.
12. Victorious market wizards increase their position sizing in winning streaks and decrease their position sizing in losing streaks: For instance, if I traded currency markets with a $100000 – account, I’d use 0.5 lots per trade with 100-pip stops (with the assumption that I wouldn’t exceed 0.01 lots for each $2000). If the account increased to $120000, I could increase the position sizing to 0.6 lots (thus making it 0.8 lots if the account increased to $160000 or 1.0 lots if it increased to $200000). Initially, if the account was decreased to $90000, I’d reduce my position sizing to 0.45 lots or 0.4 lots if the account was decreased to $80000. What certain gamblers have branded minuscule position trading volumes has been part of my effective safety rules in the markets. A female trader once reveals that, by risking 1% or less per trade, she finds it easy to remain indifferent to an individual trade. Never increase position sizing during a losing streak, with the hope of recovering your losses quickly. You must always control the exposure of your portfolios, since you aren’t sure whether the next trade would be a winner. You just need to stop doing what doesn’t work for you and embrace the winning principles that have stood the test of the time. The permanent safety of your account is far more important than the returns you anticipate. Sometimes, it’s a few trades which are allowed to run that’ll recover your truncated losses and add more value to your portfolios – thus pushing you ahead. It might even be a few trades per annum. Diligence and perseverance are needed in trading.
Part 3 of this series is now available.
Conclusion: Financial instruments reward people with money as they put their portfolios at stake. In this regard, putting portfolios at stake is what brings financial freedom. This is a staunch principle of speculation and market activities. Are you a successful trader? If you’re, please continue to enjoy the fruit of your effort. If you’re not, solutions are available. The benefit of doggedness in trading shows that your success is closer to you than you think. Even if your trading performance is satisfactory, you can still do better than that. You’ve not reached your fullest potential. Your present track record is never the most astounding that can come from you. You’ve not attained the summit of your glory in trading. There are tools and services that can help you have the best trading experience available anywhere. For top-notch experiences, you can subscribe free here: www.advfn.com
This article is ended with a quote from Dr. Janice Dorn:
“If you are not in constant attention to the small still voice inside of you that keeps you centered and in the present, you will always feel the most fearful when you should be the most greedy and vice versa. If you are watching every tick, hanging on every piece of news and noise that comes to you through the media, fibrillating on a minute to minute basis between fear and greed, in a state that you cannot sleep or are in terror, or so elated that you know your position will just keep going up and up, then you really need to get a grip and get over yourself… You have the power to be a consistently profitable trader if you get right with yourself, go with the flow, stay centered and take total responsibility for your thoughts, beliefs and actions.”
