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Originally Posted On: https://tickeron.com/blogs/3-tips-to-be-successful-in-trading-8913/

Stock trading isn’t for everyone. It takes a certain type of person to handle the pressure and maintain the discipline necessary to be successful at it. The burnout rate for newbies is high. The profit ceiling for those who stick with it is unlike any other profession on earth.

If you’re contemplating a career in stock trading or have already started your journey and want to get better at it, pay close attention to the tips in this article. There are just three of them. We didn’t want to bog you down with a “Best Practices” list, so we’re keeping it simple.

Why only three tips? As a trader, you’ll appreciate this. The number three is the smallest number you need to create a pattern. When analyzing a chart pattern, two points don’t tell you anything. It’s the third point that establishes the pattern for you.

We also wanted to avoid the adverse effects of a burdensome list of “how to” suggestions that simply mire a trader in mediocrity. Your job is simple. Buy a stock low. Sell it when the price goes up. Everything else is just noise. Follow these suggestions and you’ll do well.

Tip #1:  Self-Reflection

Forbes Magazine published an article back in 2017 claiming that 90% of day traders fail to make any money. That’s how many amateurs are out there. Stock trading isn’t like going to the casino, where the odds favor the house. Those who do it properly make a good living.

Self-reflection is a trader’s ability to look at mistakes, bad habits, and patterns that lead to losses. The definition of insanity is to continue doing the same thing over and over again, expecting different results. When a plan doesn’t work, you need to change it.

That’s assuming, of course, that you have a plan in the first place. Newbies have a tendency to be reactive instead of proactive. The trading world is filled with cautionary tales about going “all-in” on a new trade to make up for recent losses. That’s not a formula for success.

A self-reflective trader will evaluate his trading plan and look for areas to improve it. If you do that midday, you’re not being smart. You’re running scared. Assess risk before the day begins, decide how much to invest in each trade, and then execute. Evaluate later.

Mistakes are usually easy to see in hindsight. We’re not talking about losses here. Those happen for a number of reasons. Uptrends and downtrends don’t always occur when chart patterns predict they will. That’s not your fault. Ignoring the patterns is.

Another potential pitfall to be conscious of is behaviors. To be effective at day trading, you must commit yourself to be present. Taking too many breaks during the day is a behavioral error. Straying from your plan is another. Self-reflection will help you recognize these errors.

It might be that a trader is good at shorting the market in terms of risk to return ratio, rather than going long. When you learn that about yourself (through self-reflection), don’t try to be what you are not. Stick to shorting the market. You’ll be more successful.

One final area to reflect on is unique patterns that lead to losses. Baseball players often have certain pitches they simply cannot lay off. They swing, miss, and strikeout. Traders are no different. If a pattern is causing consistent losses, stop trading based on that pattern.

In twelve-step recovery programs, this is known as a “personal inventory.” Write out a list of all the aspects of trading you should be paying attention to and use that list daily to reflect on your trading activities. This is a key exercise in becoming a better trader. Check our Stock Market Live Today

Tip #2: Full Concentration 

A hunter will lie in wait for hours until their prey approaches the local watering hole. I know we’re getting heavy on the metaphors here, but that is the mindset a trader must have to be successful. Patience and full concentration on the task at hand is essential.

Unexpected interruptions and external stimuli are killers in the trading world. You must have zero disturbances when you’re working. Big gains and heavy losses can occur in moments when you’re not paying attention. To avoid that, follow these suggestions:

• Set Up a Dedicated Workspace: Sitting at the kitchen table where roommates gather is not a good environment to do day trading. If you’re serious, create a space where you will not be disturbed. A separate in-home office is best, but all you really need is a dedicated space where you won’t be bothered. Make sure it has good ambient lighting.
• Upgrade Your Internet Service: Internet failure is one of the worst things that can happen to a trader. Before you begin, upgrade your internet service. It may cost a few dollars more, but that stable high-speed connection will make a big difference once you get into the heat of battle. Your tech is the last thing you want to worry about.
• Invest in a New Computer: Similar to your internet service, your computer needs to work all the time. You’re not doing graphic design, so extended memory really isn’t an issue. You will need speed, though. Look for an Intel Core Processor that’s seventh generation or better. The MacBook Pro and Dell XPS 15 are good choices.
• Buy Some Headphones: Find a quality pair of noise-cancelling headphones. Don’t cut costs and buy the Walmart brand. Spend some money on these. Many traders like to listen to music while working. It keeps background noise away and can be soothing if you go with a non-lyrical mix. Classical or soft rock instrumental fit the bill.
• Have a Discussion with Family Members: All of these preparations will be for naught if your spouse and children interrupt you whenever they feel like it. Sit down with the family members and/or roommates you live with and let them know that you plan to start day-trading. You may even want to have a “do not disturb” sign for your door.
• Power Off Your Mobile Phone: Voicemail was created for a reason. There are few things in life so important that you can’t check on them later. Power off your mobile phone when you’re working. If there are situations that need to be monitored, schedule breaks to check for missed calls and messages. You’ll need to stop for lunch at some point.
• Remove the Television: You can power off your phone and stick it in a drawer. You can’t do that with a television. Your dedicated workspace shouldn’t have one. Traders don’t watch CNN for stock tips. They use technical analysis and chart patterns from platforms like Tickeron to make their trade decisions. You can watch TV when the day is over.
• Stick to a Strict Schedule: Start your day when the market opens and end it at the closing bell. That goes for overnight sessions too. Schedule your breaks for a specific time and close out all trades or set stop losses before you walk away from the computer. This will help you concentrate exclusively on your trading activities. Check our Market Overview

Tip #3: Strict Risk Management  

If you’re new to our world, the definition of risk is very different here than what your understanding of it is now. In the non-trading world, risk is a long-term concept. Your 401(k) or Roth IRA is composed of conservative, moderate, or aggressive holdings.

Risk in this world is evaluated on a trade by trade basis. It’s also a more scientific concept. The best traders know exactly how much they’re going to risk per trade and set up a plan to make a certain number of trades per day. This process is known as risk management.

This isn’t something you’ll learn to do in one or two sessions. We recommend exploring new and better risk strategies by using a trading simulator before going live. One of the very best is Tickeron’s Paper Trade application. Spend some time there before using real money.

Do not change your risk management strategy when you incur heavy losses in the early part of a session. It’s not uncommon to be down early and recover as the day goes on. Consistency and good study habits between sessions will increase your odds of success.

Check your emotions at the door. They have no place on the trading floor, even when you’re trading online. Set up a Robinhood account if you want to buy and sell on “gut feelings.” That’s where the rest of the amateurs are hanging out these days.

This suggestion falls in line with the other two we’ve already presented here. 1) Practice self-reflection. 2) Fully concentrate when you’re trading. 3) Stick to a strict risk management strategy. Do all of these things and you will be successful in your profession.

We invite you to check out our premium products — they’ll help you be best prepared to take on the market. One of the premium products that might be helpful for a new trader is the AI Pattern Search Engine. For a continuing trader, AI Real Time Patterns and our Screener, are a great way to pinpoint exactly what you’re looking for and to monitor the securities for an extended period of time.