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Strategies & Market Trends : DAYTRADING Fundamentals -- Ignore unavailable to you. Want to Upgrade?

To: Eric P who wrote (18045)	12/15/2008 10:07:32 PM
From: Eric P	1 Recommendation Respond to of 18137

Logical, Not Emotional A successful trader is logical, not emotional. They realize that what they 'want' is irrelevent to the market and that the market will not always do what is expected. The successful trader realizes that their 'job' is to make decisions that put the odds in their favor, and they react to the what the market is telling them. Emotions (such as anger, fits of profanity, screams of joy, etc) are not in the toolbag of most successful traders. Instead, cool, composed logic and sounds decisions are key. For example, during the while trading environments of September and October 2008, an emotional trader may have lost their bearings with the wild action, while the cool-headed logical trader simply continued to follow his/her trading plan, and rack in the cash. Keep your head about you. Don't panic, don't become euphoric. While the market is open, try to keep yourself at a steady mental state, logical and composed, ready for whatever the market throws your way.

To: Eric P who wrote (18045)	12/15/2008 10:09:44 PM
From: Eric P	1 Recommendation Respond to of 18137

Humble, Not Egotistical A successful trader is humble, not egotistical. The trader that "knows it all", will typically quickly be proven wrong by the market. The humble attitude leads a trader to be willing to admit mistakes quickly, close out losing trades, and move on without loss of confidence. An egotistical trader is more likely to argue with the markets, potentially leading to huge losing days or possible account blow-outs. You don't need to win on every trade, or even on every trading day, or every trading week. A humble trader is able to admit that his trading is creating nothing but losses that day, and stop trading until the markets are better suited to his/her style. A humble trader is less likely to double-up into excessively risky trades, in order to 'get back even' on the trade or on the day. A humble trader has nothing to prove, to anyone, and can freely admit mistakes to themself and others, enabling them to quickly and easily react to what the market is telling them, with little regard for it's contradiction to what he/she may have expected only minutes earlier. Conversely, and egotistical trader might confidently tell his friends what is 'going to happen' and is unwilling or unable to subsequently change his mind when the market tells him otherwise. Once he's made a public proclamation, he can't go back on his 'call' or he might appear to be wrong. The successful trader can't tie up their self image or self worth on a single trade, or a single trading day. Keeping your attitude humble enables you to simply treat each and every trade as individually irrelevent, and allowing you to focus on doing what's right, and not being right.

To: Eric P who wrote (18045)	12/15/2008 10:13:06 PM
From: Eric P	1 Recommendation Respond to of 18137

Tend to be Tightwads, Not Heavy Spenders Most successful traders I know are tightwads with their money. While this is not a criteria for being successful, I think this is a characteristic that helped lead to their success. Ben Franklin once said "A penny saved is a penny earned" => I can't think of a career where this is more applicable than it is in trading. Being a tightwad puts the trader in the right mental state to become successful in their trading. I'll suggest several examples: - A struggling (but tightwad) trader has much lower living expenses than a struggling trader with a high lifestyle. Therefore, the tightwad may be able to survive 12 months of learning curve, while the high living trader will find another line of work when his savings evaporate after 6 months. - A tightwad trader carefully reviews of all their trading expenses, focusing on every angle for where they can save some cash. Do I really need that $5-7k trading seminar, or will I be better off saving the cash and learning directly from the markets? Are the commission rates that I'm paying really fair, given my trading volume (and re-asking this question over and over as your volume changes)? Which routing option is best for my order executions, in light of the various routing fees and performance? Not amount to save is too small for the tightwad trader, and it all adds up. Think about it, successful trading is all about making money. It's about selling for more than you paid for it. It's about making dollars, or nickels, or pennies from your trades. Let's think about is some more... You want to buy a stock on it's breakout at 25.17, but the stock got away from you and it's now 25.26, do you still buy the stock? It's 'only' nine cents above your intended price. Well, the tightwad would likely admit that he wanted it at his price, and now that price is not available, and he's not going to 'pay up' for the stock at these 'expensive' levels. The successful tightwad might accurately realize that his average trade generates only a profit per share of a couple of cents, so giving up nine cents on an entry likely makes the trade very suspect at these prices, indeed. Note: Certainly, once a trader becomes extremely successful, they can 'afford' to increase their standards of living. However, most tend not to spend excessively and live way beneath their means. This is also very important, and prudent, as most traders have only their own savings to support their retirement and health insurance for their lifetimes, so it's best to build a sizable lifetime nest egg, prior to spending excessively. Along these lines, the tightwad trader realizes that the 'glory days' of trading (whatever that means) may end tomorrow. As a result, they want to ensure that their savings will last forever, in case their trading income drops to zero beginning next week. For many, many reasons, I think having a tightwad mindset is an important characterist of many successful traders (as well as many unsuccessful traders that are headed towards success).

To: Eric P who wrote (18045)	12/15/2008 10:15:43 PM
From: Eric P	2 Recommendations Read Replies (1) \| Respond to of 18137

Skeptical, Not Gullible A successful trader is skeptical. This is especially true when it comes to trader 'education'. When people tell you trading is easy, you should be skeptical. When companies tell you that they can teach you how to make $100k+ per year trading, you should be skeptical. When a newspaper advertisement tells you that you can make $6k per week from your own home using EBay, you should be skeptical. When things sound too good to be true, a successful trader (or struggling trader bound for eventual success) don't take the bait. Trading is difficult. Trading is not something that you just sit down the first time, and begin milking the market for $1k per day. Granted, successful traders will make over $1k per day very consistently, and it will look easy. But, it takes a long time to master the skills need to be able to duplicate that success. Let's discuss briefly about seminars, paid chatrooms, newsletters, and bootcamps. I chuckle thinking back at the Online Trading Expo, which I attended, last month in Las Vegas. The expo hall was filled with vendors begging to give you the secrets to untold wealth, if only you'd pay their modest fee for the answers. Tell me, if anyone had the secrets to untold trading wealth, why would they be sharing them with you? And for such a bargain price of only $59 per month (or one time fee of $3500, or whatever)? Why would anyone sell you something 'worth' $100k+, for only $250? A skeptical person would simply laugh and move on. => If it looks like a ripoff, and smells like a ripoff, then it like IS a ripoff. The successful (or soon to be successful) trader doesn't fall for get-rich-quick schemes, and aren't interested in the 'easy way' to become successful. Those that are subject to taking the bait and falling for these schemes will only waste time, money and often their hope of ultimate trading success.

To: Eric P who wrote (18045)	12/15/2008 10:18:07 PM
From: Eric P	Respond to of 18137

Are Competitive by Nature, and Absolutely Despise Losing A successful trader hates to lose. Typically, these are ultra-competitive people, that play games to win. They are people that either want to be the best, or don't want to try. There is no half way. Certainly, successful traders lose at times. But, they are always focused on improving their 'game'. Like an Olympic athelete, the successful trader is constantly focused on improving every facet of his/her performance, working on weaknesses, to make them strengths, identifying and mastering new techniques and skills to add to their trading arsenal. Winning and losing is not just fun for these people, it's personal. They will choose not to trade, when the alternative is losing. And even consistently successful traders realize that there are times when the odds are just not in their favor, and they step aside and don't trade during these times. => They don't trade for fun, they trade to win.

To: Eric P who wrote (18045)	12/15/2008 10:20:13 PM
From: Eric P	Respond to of 18137

Love to Trade The successful trader LOVES TO TRADE. Trading is almost an addiction for these folks. They have been known to dread weekends and holidays, and may avoid vacations (or at least trade every day of the vacation). These guys can't imagine ever retiring, because they're having too much fun. They feel as though they were born to trade, and that they've found their life's calling. They enjoy it so much, that they think about trading for most of their waking hours. Instead of wondering who is playing the late Sunday football game, they are wondering where the futures are opening. Instead of laying in a hamock, thinking about the latest electronics game or audio system, they are pondering methods to improve their trading strategy. Because of their 'love of the game' and constant focus on the financial markets, they tend to learn faster and retain information better than their peers, for whom trading is just a "job". People always tend to excel at things they love, and this is certainly true with trading.

To: Eric P who wrote (18045)	12/15/2008 10:22:46 PM
From: Eric P	Respond to of 18137

Are Responsible Successful traders ARE RESPONSIBLE for their results. They take ownership of their bad trades, while sometimes crediting good fortune for their good trades. First and foremost, though, they accept responsibility for all their trading results. It was NOT the fault of the stock broker (who chose them?). It was NOT the fault of the internet connection (who picked the ISP, or didn't have a backup?). It was NOT the fault of their trading buddy that recommended the trade (who chose to take the trade?). Successful traders DO NOT, EVER blame other people or events for their failures. Successful traders accept responsibility, and where ever possible, seek to prevent future recurrences as much as possible. Failing traders, on the other hand, make excuses. => Don't make excuses. Be accountable to yourself in your trading.