Is it possible to be a successful trader and make a living from it? Yes, but it is not easy. It takes a lot deal of hard work. You need to read books to gain your knowledge, and perform your own research. Just because you have made a few successful trading in short term, it doesn’t mean you will win the game in long term.
When you enter a position and you have doubt why you are in it, GET OUT IMMEDIATELY!. If you do not know why you are in a trade, then you are guessing/betting.
Trading is mostly psychology game. After a significant losses or frequent loss, our psychology can get in the way of trading. A lot of traders experience large losses. Many of them stop trading and never return. Others work hard to understand what went wrong and try to fix their system. To be a successful trader, you need to manage both the technical game (your trading system) and the emotional side of trading.
According to a book written by Alexander Elder: Trading for a Living, : Psychology, Trading Tactics, Money Management, to be a successful trader you need three M’s: Mind, Method, and Money. The book helps you discipline your Mind, shows you the Methods for trading, and shows you how to manage Money in your trading accounts.
To be a successful trader, you need to:
- Become a cool, and calm trader
- Read the behavior of the market crowd
- Develop a powerful trading system
- Find the trades with the best odds of success
- Find entry and exit points, set stops, and take profits
There are some lessons you can learn from the book:
- As an individual trader, you need to be discipline and patience to beat the institutional traders who have faster information, a better research reports, and lower psychological burden for trading Other People’s Money (OPM)
- Opening prices are determined by amateurs whilst closing prices are determined by professionals.