20 Habits of Wealthy Traders

hi there Dave Westgate from Viper report.com with the 20 Habits of wealthy traders I've been interviewing traders for about 15 years now to find out what makes the good traders different from the traders who lose money you've all heard that most traders lose money why is that what makes the difference between those really good traders how are they finding entries how are they doing their exits how are they running their trading business how are they running their lives around their train was was what I really wanted to find out I tried to avoid this some of the stuff that's kind of obvious that you hear all the time like you know let your winners run cut your losses you'll see some hints of those kinds of things but I really wanted to get to the crux of different things that you may not have heard of that really make the difference between wealthy traders and someone who just struggles constantly maybe have some winning trades and a lot of losers because there is a difference there they are doing something different so let's get right into it we're gonna talk about what makes them different number one wealthy traders are patient with winning trades an enormous ly impatient with losing trades so this is different than let your winners run most traders that are out there what they do is they get into a winning trade and what happens they get extremely anxious we worry oh my gosh I made money on this trade I'd better get out now because what's gonna happen if it goes into a loser right they start to get very impatient and they're like got that finger on the sell button because they don't want it to have their winner turn into a loser on the opposite side if they've got a trade that is going against them a lot of new traders and a lot of just traders and generals will say you know what I'm gonna wait just a little bit longer to see if this thing turns around does that sound familiar to you you probably have done that yourself I know I used to do that a lot more wealthy traders turn that just completely on its head they do the exact opposite their patience with the winning trades and give it time to work and there are ridiculously impatient with losing trades what does that mean it means that they are out immediately if it goes against them here's an example let me show you kind of a little graphical interpretation of what this means here's what a trade timeline looks like for a wealthy trader losing trade losing trade losing trade big trade winner losing trade losing trade losing trade losing trade big trade winner so they are incredibly impatient losers cutting their losses immediately so when they go to three tix against them they're out and if you continually do this if this is all you do out of the next 20 things I'm gonna talk about if all you do is immediately cut a loser and let your winners go to their full potential you will have gone 80% of the way there to doing what wealthy traders do it's extremely important so I think there's a lot of people out there that think that wealthy traders just have great trades every single time absolutely not true they've got a lot of losers in fact they lose more than they win most of the time but they are so inherently crazy about cutting those losses that they are able to take kind of the randomness out of it and use that a little bit of their edge they have to make their winners go for them and actually do the work and make the money that they are gonna make for that week that month that year so impatient with winners excuse me impatient with losers very patient with winners all right number two wealthy traders realized that making money is more important than being right there's just this human characteristic we all have that we want to be right about our decisions you want to make good decisions you brought that up you probably raised that way I want to make great decisions good decisions that are good for me and my family the trouble with that is is that you get locked into this idea that hey this stock is not worth this much money or opposite is this stock is way undervalued there's no reason at all for the stock to be this low I'm buying it and as the stock continues to go against you you're like there's no way I am right about this I know I'm right about this we've all heard that old adage the market can stay wrong longer than you can stay solvent it's important they realize that making money is the goal you cannot express your will on to the market it doesn't work that way it will slap you in the face every single time so that means they need to be able to change sides if they if they have a bias and way if the market is telling them that they're wrong that's okay they'll switch sides and do what the market is telling them to do you cannot tell the market what to do it is the exact opposite so well three traders realize that making money is more important than being right I think that's always a good thing to keep in mind number three wealthy traders look at charts as a picture of where traders are lining up to buy or sell what does this mean so in a regular chart all of us at some point are using technical analysis even if it's the most simple moving average the nine-day crossing over the twelve the three crossing over the six whatever you use the wealthy traders look at charts not from the lines or the bars on the charts they see literally I think they see traders lining up at places where technical analysis zones tell them something is going to happen so if your idea of a good trade is a certain moving average crossing over another one they don't see that as an end LBL buy point or a sell point they see it as other traders are there standing there waiting in line to buy or sell at that point they see charts as simply a way to look at where traders are waiting if you're drawing a line like a trend line down or a trend line across a horizontal trend line and something is crossing above it they see that as that's not just because it's crossing above the line it is that's where traders are looking to get in and buy so they start to see charts in terms of where traders are lining up very important distinction before they enter any trade they know exactly where they will exit for either a gain or a loss I see far too many traders saying I'm just gonna get into this thing I'll figure out where the exit point is after I'm in after I get filled wealthy traders don't think like that if they don't know where they're gonna exit either side whether it's a loss or a gain they don't get in you've got to know those points beforehand and have an objective reason why you're choosing those things so never get into a trade if you don't know where you getting out for a loss or a profit both of those numbers are very important wealthy traders know them beforehand number five they approach trade number five with the same mindset they did on the four previous losing trades what I mean by this is we've all had those eye those times when we'd get three trades in a row four trades in a row that go against us that's gonna happen statistically that will happen what happens on that fourth or fifth trade that comes along your setup is there but now you're gun-shy you're thinking I'm not reading the market right something's not right here I'm not gonna take this trade and what happens inevitably the trade works beautifully and would have wiped out the losses from those previous four losing trades plus made you a bunch of money that day it's happened to everybody and it's not because you're reading the market wrong although there's ways you need to know if you're doing that too but 99% of the time is just statistically chart patterns don't work on a percent of the time they may not even work 60% of the time so you've got to know that statistically there will be times when four or five trades in a row don't work and you've got a if you're confident in your system and you know you've got an edge in that technical analysis or know that chart pattern you've got to be able to take that next trade with the same gusto and as enthusiasm as you did those previous four wealthy traders don't get bothered by the idea that they've lost on four previous trades they know statistics they know that that can happen and you know every time if you don't take that next trade if it matches all of your criteria it's gonna be the one winner you didn't take and it's gonna just make you mad Davey even more so keep that in mind number six they use naked charts and focus on zones let me just show you something here that's a chart I just threw up there and put a bunch of things in there's arcs there we've got Fibonacci we've got pitchforks we've got trend lines maybe a few moving averages in there I can barely see the bars anymore technical analysis isn't something where the more scrap you throw on your your chart the better it works let me tell you give you a little secret about technical analysis there's thousands of different indicators out there every single one of them problem it works every single one will work overtime if it's been back tested you've got to find one that fits your personality and your gut instincts as a traitor and use it so the most of the traders I see that are wealthy they don't use any maybe they've got a couple of moving averages on there maybe if they're purely a Fibonacci or a purely Elliott Wave they'll use just that but rarely will they flip-flop and throw more stuff on the trade is if you're waiting for nine things to line up and say it's time to trade you'll get maybe one trade every 10 years that's a long time to sit in front of your computer and even then there's a chance that may not work out so get used to watching price and price only and get a feel for what you're trading there are some traders out there that can trade something different every single day my recommendation is is find one thing that you trade well you just say start with the e-mini zest SPS and just trade it with just price get used to how that stock reacts to different news items on price and maybe use one or two things you feel comfortable with the more stuff you have on the chart the more confusing it's gonna get and it doesn't help you it doesn't make you a better trader number seven they realized a long time ago that being uncomfortable trading is okay and what I mean by that is we all feel like once we start to trade we're gonna get to a point in our confidence level that we're gonna sit down every morning at the computer and just be perfectly confident in our strategies confident in our indicators in our technical analysis in our chart reading ability that trading will somehow become easier and almost every wealthy trader I talked to told me that that day never came for them and it probably never will that you have to be comfortable being uncomfortable you're never gonna get a get to the point that you're going to be totally in sync with the markets and able to find those trades that are always winners the reason is is because you're never gonna have 100% complete information unless your insider trading which I hope you're not because you're going to jail but you have incomplete in information about how this is gonna work out this is why I sometimes think that the police officers can make good traders because police officers have to make decisions based on incomplete information is that a gun the guys pull out of his pocket or a cell phone I won't know until he either fires it at me or it makes a phone call so you have to be uncomfortable with that you just know in your heart in your mind that you're never gonna get to the point where you're totally confident sitting down most of the wealthy traders I've talked to say yeah every time I put a trade on I'm a little edgy and and that's okay I've gotten to the point where I'm okay doing that because I know I'll never have 100% guarantee of what's gonna happen next and that would be the only way you'd be totally confident that's not gonna happen so get comfortable being uncomfortable number eight the markets are their workplace they are a participant not an onlooker this is a little more kind of vague but there's an important point here I think new traders and even traders that have been in doing it for a few years they almost feel like they're not they don't really belong like they're an outsider trying to kind of get a nut in somebody else's world and you got to get past that you have just as much of right to be there and make your living in the markets that as anybody else you are not any Dumber you are not any smarter than anybody else when it comes to this stuff they're probably geniuses out there that try to do computerize their stuff and couldn't make it work you have a right to be there the markets are open to you don't feel like you are a fraud by trying to get in there and make money there are people out there that'll tell you I don't know don't forget trying to trade hedge funds have they're much better fun to them much more information than you have that may be true but that doesn't mean that you can't get in there with them and make money and learn how to do this you have a right to be there be confident that you are not someone from the outside looking in you have just as much a right to make money and can do this you will you will succeed in this if you work hard at and are diligent about number one cutting your losses immediately and being patient with your winners number nine they stopped trying to pick tops and bottoms and I get a lot of flack on this one because there are a lot of traders out there that say I make my living on tops and bottoms and most of the time I have to say I don't believe you there's a reason why I don't think that that's right it is extremely difficult to see tops and bottoms let's look at this chart here if you look at this and I just put this up here from one that I found it was trending well which is the only type of stock that I would trade anyway and I put the times or the bars where price trend changes in between red bars so you see the two vertical red bars on either side of the bar where things start to change so how much of that chart do you think is encompassed inside of the two bars in each area maybe five percent four percent of the entire chart so why do you think it is that most traders trying to make a hundred percent of their living in 5% of the chart why are we trying to trade and find those tops and bottoms meaning you have to time it almost perfectly every single time to make a living how about instead trade outside of those lines when things are trending when you have a much better opportunity to make money in these markets if you're going long and sometimes even going short quit trying to buy tops and bottoms almost all of the wealthy traders that I spoke with don't do it anymore that was a fool's game they all tried to do it at first because somehow everybody thinks that that's the way to make money is to find it you know right when it comes down to the blue line I'm gonna buy it and it's gonna head back up again it doesn't work that way trade with the trend especially if you're newer you're gonna have a much easier time making money now inevitably I'm gonna get a few emails today people with people saying no no Tim you're absolutely wrong you know trading pivot points and turning pivot points I shouldn't say that trading turns in that short-term trade is the only way to make money well okay awesome I'm glad it's working for you I never could make it happen and most of the people that make millions of dollars and hundreds of thousands dollars or they're living in the markets don't do it so that's all I'm telling you I'm just giving you a data point okay quit trying to pick tops and bottoms number 10 they stopped thinking about the market as cheap or expensive if you do one thing today I want you to never utter in your life again about a stock or future or an option as being cheap or expensive because there is no such thing a stock at $1 may be cheap but if it's a piece of crap company and you buy it at a dollar and it goes to two cents that's the most expensive stock you've ever purchased likewise if Amazon is at seven hundred and fifteen dollars and they're about to come out with some new stuff and they're gonna crush earnings and it goes to eight hundred and fifteen that was a relative eye right there is no cheap or expensive in a wealthy traders mind you there is simply one thing is somebody going to pay more or less for this in ten minutes in one hour in one month that's all they think about there's no cheaper of expensive it is is this going to be worth more or less later that's it doesn't matter how much it is Google and a thousand dollars may be a bargain when it goes to two thousand okay I think you give the idea here stop thinking about the market as being cheaper expensive there is no such thing it is just how much it's worth later to somebody else so here's a tip for somebody if you are having a really hard time by making money as a trader which I know a lot of people are I tell people to do one thing and it's the complete opposite of what most people are doing right now which is maybe why they're having trouble making money I want you to buy higher highs and sell lower lows if all you do is go out there and buy stock or options in stock that are 52-week highs and sell stuff that is at fifty two we close you have greatly increased the chances of you're making money why Oh Tim wait a minute those 52-week highs those are getting really pricey getting expensive go back and check number ten there's no such thing most people out there I think are losing money because they're trying to sell higher highs and ba and buy lower lows because they think it's going to turn remember we're going to go back to number nine stop trying to pick tops and bottoms if you're losing money if you're having a hard time finding good trades do this for a month I promise you you will start to see results by higher highs and sell lower lows and it doesn't matter for in a bull market or a bear market things that are going higher tend to continue going higher and things that are going lower tend to continue going out lower okay you're not gonna make money on every single trade this way but you are gonna put yourself in a much better position odds wise to do well okay number 11 they are willing to change sides if the market tells them to do so this is a corollary to it's more important to make money than be right a lot of guys get up in the morning and they say SP e mayonnaise is going higher today Y Gold's going down or gold is going up and Yellin speaking today and blah blah blah if fed whatever they have a bias about what the markets going to do and they refuse to make any trades that are against that bias wealthy traders don't sit in front of their computers in the morning fire them up and say I think the market is going to do X today you know what they do they wait and see what the market is going to do and then they trade that so it also goes back to not telling the market what to do because it will always slap you in the face change sides if you've got a bias everybody has biases in their life okay we have a feeling about what we think is gonna happen if you see the market doing the opposite of it trade the opposite of it don't try to inflict your will on the market it doesn't work number 12 they trade aggressively when trading well and modestly when they are not I see so many traders who say I've lost four trades in a row I need to triple my trade size for this next one to do better to make up for that no you can't do that if you're trading well you need to trade are your trading you badly you need to trade less okay only trade more when you have are in the groove of the market your trades of gunwale that day then maybe you can scale up your size if it's still in line with your trading plan if your plan doesn't say to do that then don't do it we'll talk about that in a minute but great traders wealthy traders only trade more when they're trading well and lower their trade size when they are not I had this thing for me it was part of my trade plan was if I have three losing trades in a row on a single stock on a stock I was trading actively I had to go down to a single share until I had a profitable trade meaning I may not be profitable in a single share with commissions but that I was right about the direction of the trade I was correct in my assumption and my trade direction you got to have something in a trading plan that says when this happens to me I'm going to reduce my share size until I'm reading the market better and if that means you go down to a single share and have to trade a single share until that happens fine you know what I'd rather pay the Commission's then and then buy a thousand shares of something be wrong on it and be a thousand dollars wrong rather than a you know a sixteen dollar Commission people get home so I want Tim I'm gonna lose my you know fifty dollar Commission even if you're trading at a regular full-size broker if I do that I can't trade a single share it's not about paying the Commission it's about getting your mindset into the into more sync with the market so put that into your trading plan thirteen they realize the market will be open again tomorrow I've missed trades we've all missed trades where we've said this is a good trade maybe I should get in and you don't and it goes exactly how you thought it would right there's this idea and I think it's just human nature we feel like I've missed it this fear of missing out FOMO it's it's never I'm never gonna have this opportunity to trade Netflix all the way down and then bring it back all the way up I'm never gonna have this opportunity on XYZ suck again I promise you there will be thirty five thousand opportunities gumma coming up in the future the market will be open again tomorrow don't beat yourself up because you took a losing trade or because you miss something there are opportunities coming seconds from now 14 all right I'm gonna hear a little crap about this too but it's important and I truly believe it wealthy traders never add to a losing trade ever ever this goes to cutting your losses quickly this to never ever add to a losing trade now there is this idea that okay trades gonna go against me a few ticks but hey I know I'm right on this so I'm gonna double up in size I'll make even more money when it goes the right way never do that if the trade is not going against you get out a B at the very least if you're not getting out right at that tick never add to it now some people are always email and say hey Tim wealthy traders I have to add to a losing position because I'm trading 40,000 shares at a time and I can't get in ought to that it the price I want all at one okay I hate that hasn't even say this because it might give you an excuse to do this and you shouldn't do this so unless you're trading millions of dollars a day don't do it but some people have to because they to get the size they need at their level they have to do it in blocks and to Train initially may go against them a few ticks before they get more of those blocks in that is not 99.9 percent of the traders out there never add to a losing trade write it on a post-it note stick it on your forehead stick it on your computer it's important fifteen cash is the goal but never the measure of success why is that Tim are we here to make money are we here not to make money I'm here to make money so why wouldn't I make a thousand dollar goal my goal for the success if I've had success that day and the reason is because you're a human being and when you attach a dollar figure to the success of whether or not I've had a good day trading you end up making trades you shouldn't be making in order to make a thousand dollars people who say I have to make a thousand dollars every day to pay my mortgage to pay my bills to do what I was making when I had a full-time job you are going to fail because it will force you to make trades you shouldn't be making to get to that goal here's a better way to do it instead of making cash the goal your goal as a measure of your success for every training day should be did I follow my rules when I got in and trades and then I got out of trades yes those things will lead to cash but as long as it's not cash as the the goal you're looking at if you're following your rules and the that becomes the goal I promise you the cash will follow but you can't make it the initial goal you cannot say I'm gonna make 100 bucks a day $1,000 a day it doesn't work make the goal being I've had a successful day if I followed my rules and stuck to my discipline about that will you have losing trades and when you've done that yes and yet guess what those days can still be considered a success because over the long term that will lead to the end-all be-all which is money that's what we're here to do 16 they read books about mobs and riots I thought this was interesting sir sure they read books about options or trading in general but they also without a without an exception read book about psychology and crowd wisdom why because that's what the markets is the markets is simply nothing but a mob and a riot here's I write I put a few of them up here the wisdom of crowds James sirrah lucky the art of strategy and markets mobs and mayhem when you understand that the markets are nothing but a riot and then it's just human emotion they're buying and selling you're in a much better position to understand what drives price action read those books 17 all right now this is probably the the most difficult one of all of the 20 that I'm going to do and actually there are 30 in here I I'm learning about this still and this is a work in progress okay I know this may not be a great explanation but they provide liquidity to the markets while watching price and volume what do I mean by that the the best way that can describe and I'm still working on this so forgive me and email me if you think you have a better way of describing this but here's the way I described it and somebody described it to me this way it started to make sense to me you go into a grocery store and you see that 2% milk is the hot item today everybody seems to be buying 2% milk there's just a run on 2% milk so while everybody else is going to the back of the store getting into the refrigerator and getting their gallons of 2% milk out and walking up and walking into line with the rest of people in line to wait to check out the wealthy trader instead we'll walk up to the cashier and say hey let me get in here and run the cashier for you for a while and buy and sell and I'll sell milk for I'll make a market in 2% milk for you a little bit and they feel like they are the checkout person rather than the customer I know that's not the perfect explanation and I'm working on a better one but there's something there that wealthy traders are doing they see themselves almost as a market maker they treat their trading as a market maker not as the end retail trader okay just think about that give it some thought while you're on the treadmill tonight doing some exercise I hope you're exercising because that will help you with your stress level and I'll get better at this but but think about that there's something there that wealthy traders are doing 18 they have a way to gauge fear greed and speed of the markets an example would be tick charts 233 tick chart or a 612 tick chart the problem is on your screen if the only thing you that you're using is a 5 minute 10 minute hourly daily chart those those charts print a bar every 5 10 hour they print a new bar on you know on that time frame every time and there's no way to kind of feel for the frothiness of the market with those because they're printing that way no matter what's happening in the market no matter how many orders are coming in they'll print those bars what I do is I have a tick chart up on the far left hand corner of my screen and when I see that thing really start to move boom boom boom boom I can it's just you know kind of a signal to me that something is going on I need to take a look at the markets and with with I only had time based charts I wouldn't be seeing that it would take me longer to see that hey something's happening something's going on in the market so use just some way to fit great to gauge fear greed and speed that's that's what the wealthy traders are doing they have some way to do that and the tick chart is just an easy way kind of that I talked about that you can do that 19 they practice reading the right side of the chart not the left everybody can see the head and shoulders after it's already been done after it's already been built everybody can see the triple bottom the double bottom after the chart I mean I could get a five-year-old to see it once they saw it a couple of times the trick is wealthy traders are better at reading and seeing those patterns at the moment they begin to form now this is a little you know funky I'm not talking about having a crystal ball here but here's what I want you to do to start being better at reading the right side of the chart that hasn't printed yet when I say right side of the chart that's what I mean where the bars aren't yet where they haven't printed in a future we're not talking about mind-reading or whatever or crystal ball stuff but here's what I want you to do on something that you're trading a lot and that you're getting to know the behavior of I want you to look at that last couple of bars and I want you to picture in your mind what the next bar is going to look like do that and you'll be surprised at how good you begin to get at seeing where that bar prints okay it's not about voodoo okay it's not about reading the future and knowing the future it's about being able to see those patterns as they form because that's the only way to make money with these things it's not to see it after the fact anybody can do that but it's no good to you you need to be able to see the patterns coming as they come and the best way to do that is try and read the right side of the chart that hasn't printed yet 20 every wealthy trader has an edge they can explain to their mothers now the only person who may not have this is someone who's doing an algorithm who's a PhD who has figured out some computerized way to have their edge for most people if you can't explain how you make money in the market in between an elevator ride from the first to the third floor you don't have an edge if you can explain to somebody who doesn't trade you probably don't have an edge so it could be something as simple as a moving average crossing over another moving average it doesn't have to be complicated but you have to be able to explain it to somebody else and sound like you know what you're talking about when you do that because if you can't it means you've got some area of this it's kind of loosey-goosey gutfeld kind of stuff and that's not an edge you've got to be able to articulate what it is an objective reason why you get into a train and why you get out 21 I've got some bonus wealthy trader habits here for you so we'll go through these pretty quickly their position side is calculated exactly unrest tolerance when I first started interviewing traders I would ask someone hey so what's your standard position size and they would look at me like you're the biggest [ __ ] I've talked to you today what do you mean what's my biggest position size am i trading something that's a dollar a my trading Google at 700 or a thousand you got to tell me what I'm treating I can't tell you I just trade a thousand shares of everything so a light bulb went off in my head okay anybody who tells you that they're trading a thousand shares of something every time has no idea what they're talking about because here's how a wealthy trader we're doing this is I've simplified the math a bit but it's I want to make it easy for everybody everybody round up and I I was a poly sign not a math major so I had to do it easy on a thousand dollar account if you say if your trading plan is to risk 2% no more than 2% on any one trade on a hundred dollar stock 2% of 1000 is twenty dollars that means you can buy one share and have an $80 stop-loss or ten shares and have a $98 stop-loss okay this is very objective this is not I trained a thousand shares of everything you have no way of knowing with the average range of that stock is or how pricey it is or what your you know your risk percentages on any one trade it has to be determined and people will use this the wealthy traders use this formula and they say okay if I'm trading Google at 715 Bob Loblaw I do the math I get to trade 643 shares of it then maybe they round up to 600 or down to 600 but the point is they have an objective way to calculate what their risk is going to be and you've got to have this to work it out for yourself 2% is kind of standard but work it out for yourself what you want to do okay now that stop-loss has to be wide enough to absorb the daily range right on the second example of 10 shares equals $98 stop-loss if the average range on that hundred other stock because it's extremely volatile right now is $5 you may get stopped out pretty not quick right likewise an $80 stop-loss that's probably gonna be too far with one share you're not gonna make much money anyway so you know you've got to make sure that your stop-loss is reasonable within the daily range you know average daily range of what that stock moves so $100 stock with an average range of $5 means you can trade four shares with a $95 stop and that's your 2% okay calculate this on every single trade it cannot be I trade a thousand shares of something and I get out if it goes five bucks against me that if you see here's somebody saying that their trader has no idea what they're talking about they read one book and decided to make their living trading okay I'm probably the wrong book 22 profit targets are based on average range or something objective I hear people all the time I try to get 5 bucks out of every trade what are you talking about do you even know what if there's something only normally removes about a buck you're gonna wait and what happened it goes against you then it makes no difference or Matt makes no sense whatsoever okay you've got it to be able to have your stop-loss excuse me you have to stop us meet the average range so no kind of generally the behavior of a stock before you start to trade it you've got to know what the general normal behavior is and everything will go out of that range but on a normal average day if there is such a thing you kind of know the behavior of that stock 23 one or two trades a month make their month okay this was surprising to me I thought traders who were really wealthy made money almost every day and that's how they became wealthy nope the way they made money was they had to one or two trades a month that absolutely crushed it and a bunch of losers and that's how they made their living some of them there was a little more rare but some of them had one or two trades a year that made their year can you imagine the patience they would have to have and all the losers that they would have to go through or tiny winners to make that so I think there's this idea that that wealthy traders just make money almost every day if not every day and that's how they make their living absolutely not they have a lot of losing days to their slot they're small losers right within their range of what there is in their training plan and then they've got these these one or two trains that actually crush it because they let him win and they may be added to it after the fact after they were already you know above breakeven or something like that that's how they make money it was surprising to me maybe it was maybe this is surprising to you 24:00 confident decision makers in the face of incomplete information this goes back to being right this goes back to taking that fifth tray when you've had four previous losers you're never going to be totally comfortable you can be confident but you may still have be a little uncomfortable making decisions you're never gonna have total complete information on what that stock our futures or options is through work Forex pair is gonna do you've got to be confident even when you don't have all the information because you never will you're still going to be successful as a trader trade does not mean they are a loser this is praise straight psychological just because you are having a bad day does not mean you are a bad person sounds silly right you want to laugh but it's the wealthy traders don't take it personally and I think that's the best way to describe it they don't take the market slapping them in the face personally if they know it'll be open again tomorrow they'll do it again tomorrow 26 they buy higher highs and sell lower lows this goes back to what I was talking about if you are losing money in the markets buy the higher highs and sell the lower lows it's different than what 99% of traders are doing out there and guess what 99% of the traders out there are losing money so do what they are not doing and you will have a better chance of making money in this crazy markets their business isn't trading it's finding the right trades there are traders that will sit there for three days watching the markets and not touch their keyboard because and guess what they still call themselves traders at the end of those three days hitting your keyboard and punching buttons is not trading finding the right trades and then executing on those trades properly is what makes you wealthy being in the markets and you may miss out on things the market will be again open tomorrow they realize that their business isn't hitting buttons it is making money so you've got to wait for the right trades to come along 28th day write down and record every trade price thoughts news attitude keeping a trading journal you've heard this but how many of you are actually doing it or maybe you started doing it the first few days and like as isn't helping trading journals only work over a long period of time you've got to write down stuff I know you know one of the wealthy traders will talk to you would write more about what he was feeling in terms of his relationship with his new wife than he did about trading but it was important it affected his attitude about the markets it affected his ability to be confident and sit there and find the right trades and be patient so you never know what that trading journal is going to reveal to you you have to write it for a while and then go back and read it and see if you can find any patterns in your own behavior that are keeping you from making a lot of good decisions and making money 29 their conviction on an active trade remains unless something major changes this goes back to letting you're winners go and it also goes back to not getting out too early because you want to you're worried that something else is gonna happen if if the things that told you to get into the market haven't changed don't make any changes almost all I've done it where I've gone in and I've taken half off right fiddle with it I have to personally the way I trade is to I put a trade on I put a stop loss in I put a profit target and I walk away because if I sit there and and look at the screen and watch my trade I will mess it up I'll get it out I'll try to add to it I'll do something that's stupid that's not in my trading plan so I call it the you know set it and forget it trader that's what I am it's the only way I found I could make money and that's okay but it forces me to stay convicted on a idea that I had unless something changes and if I don't I'm out if I'm in with a profit that's okay to a winning trade does not result in taking on extra risk on the next trade just like a losing trade doesn't just because you've had a winner doesn't mean you triple your size because you think you're awesome okay yeah if your plan talks about tripling size over time fine be careful with that but you don't take on extra risk just because you think you're a great trader of that day and you're reading the markets well okay very important all right finally trade the reaction not the news okay most traders try to trade the news immediately if it comes out the wealthy traders that I spoke with say I don't trade the news I trade the reaction after the fact cuz it's almost an always an overreaction and so I trade the the reversion to the mean right I trade it back to the normal levels because if I trade the the actual new very few people can trade news unless they're insider trading because you just don't know you've seen stocks that have beat earnings for the quarter and they still go in the toilet you don't know what the reactions going to be so don't trade the initial reaction create trade the the reaction to the reaction if that makes sense okay all right so these are just some of the things we that I talked about all the time with wealthy traders I hope you find one or two things that you can implement in your own trading you know you may not have agree with all of them I'm just telling you with traders than May they're living the markets the things they did to make that money so I hope you find something useful in it and make sure you visit Viper or port comm everyday and subscribe to the newsletter and the blog too to find out more thanks a lot

Channel: Urban Gear Guys

Views: 1,386,928

Rating: 4.8643627 out of 5

Keywords: stock trading, stock market, great traders, online trading, day trading, daytrading, swing trading, how to trade stocks

Id: el10dgDa2Do

Length: 40min 12sec (2412 seconds)

Published: Tue Nov 08 2016

Reddit Comments

[u/kevin932003]

I must be a pro, been buying high and selling low since day 1