Successful Traders Use Successful Trading Techniques

What are the successful trading characteristics of today's successful traders?

Some people are very comfortable doing stock analysis and some are not. And just because you feel confident and comfortable trading stocks, it doesn't necessarily mean you will be good at it. There are no hard and fast rules on what makes a successful stock trader, yet there are several characteristics that those who make the most amount of money in the least amount of time all have in common.

1. To be successful, a trader must be patient. A successful trader let’s winning positions run, but is able to swallow his pride and close the trade when it isn't working. Patience means knowing how to be resilient, courageous, and disciplined when the markets go against you.

2. The exploration of stocks is a key ingredient to becoming a successful trader. Developing skill in both fundamental and technical analysis is suggested.

3. The successful trader is passionate and has a biting desire to succeed. The biting desire to succeed can make all the difference in educating yourself about what you want to know and sticking to your strategy when the going gets rough.

4. As they practice stock trading, potential embarrassment is not a concern with successful traders. They expect to have losses and know when to cut them as soon as they are recognized.

5. Successful traders are highly disciplined. Extremely disciplined a successful trader does what needs to be done, even if he isn't in the mood. Discipline also means sticking to your strategy, not suddenly buying or selling on a whim, or because of a" hot tip".

6. Successful traders know that mistakes are going to happen. They realize and appreciate that the ability to make their own mistakes is a necessary part of the learning process.

7. A winning trader knows the difference between defensive and offensive behavior, and when to use each - protect your money first, profit later.

8. Successful traders balance their lives. Stock trading can be addicting, a successful trader can break away 'at will' before putting too much at risk.

9. Successful traders are risk adverse. They don't like losing money and control themselves before losing a large quantity, even if they have to admit they made a mistake.

10. Getting emotionally involved or placing trades based on hunches or rumors are not characteristics of successful traders. To be victorious you have to be able to resist the urge to prove you are right and be ready to make mistakes. Greed and fear should not affect your decisions. Setting stop losses on every trade is something that promotes success in trading. This means that on more than one occasion, you will have to admit that you are wrong. By using stop loss strategies correctly, your ego and your portfolio will survive and you may be able to get back into your "pet" position again when trends tell you it is the appropriate time to do so. You will have to learn to disregard any emotional ties you have to your stock and make quick stock trends your master. Although you might miss the lowest entry points and the top selling points, you will be able to sleep at night and look at yourself in the mirror in the morning. Learning to get out of a stock position before your profits turn to losses becomes a necessity. Learn solid stock investing concepts.

Successful Tips for Day Trader

It is a well-known fact that the majority of day traders incur losses in their trades. But there are a handful of successful day traders that consistently make healthy profits over the longer-term. The question is, what really makes the difference between profitable and unprofitable day traders? The answer is, successful day traders possess a number of characteristics that their unprofitable counterparts do not. If you want to be a profitable day trader, read through this list of successful day trader characteristics in order to determine what you can do to improve your performance:

Adjusting to the market. Financial markets are entities that are constantly changing. They are influenced by a myriad of economic, political, and social factors that we have no control over. As much as technical analysis and identifying patterns is crucial to profiting from day trading, their effectiveness can only take you so far. A good day trader must be able to spot external factors that will have an impact on the price of a financial instrument and adjust his strategy accordingly.

The ability to stay neutral. You cannot let your emotions get in the way of objective trading. A successful day trader does not think the whole world is coming to end when he loses $1000 on a trade just like he doesn't open a bottle of champagne every time he makes $1000 on one. He doesn't let the outcomes of individual trades guide his strategy. Instead, he focuses on the overall outcome over a period of time and judges his performance upon it.

A business plan. Day trading is a business, and like any other business, it requires you to have a plan. A good day trader maps out every crucial aspect of his business. What are your start-up costs? How much do you want to work? What is the maximum loss you can sustain? What techniques do you want to focus on? These are questions that you should already have answered and put down on paper before you even made your first trade. If not, now would be a good time to do so.

Focus on techniques. Have you ever heard the saying "specialization is the key to success"? If you watch an experience day trader for a while, you will notice that he tends to stick to a few techniques that have proven to work for him. If you find a certain technique that works for you initially, test its viability over a period of time. If the outcome is positive, then stick to the technique. Experimenting with too many different strategies can be costly and is not a wise decision.

Money management. Successful day traders protect their accounts and manage their risks properly. With every trade they make, they risk a controlled percentage of their money (typically ¼% to 2%). If a trader has a $25,000 account and risks 2% on each trade, then the maximum loss he chooses to incur is $500. It is a relatively small loss when compared with the size of his account and will surely not spell doom for his day trading career. The key is to be disciplined enough to stick to your risk percentage.

Risk appetite. Day trading, by nature, is a risky business. A successful day trader must have a healthy tolerance for risk and be emotionally able to handle the idea of losing money. There is no comfortable trading pattern in this business that will earn you money 100% of time, so you have to get over your fear of uncertainty.

Risk Capital. A shrewd day trader always risks money he can afford to. He never trades with money that is set aside for paying off student loans, mortgages, or electricity bills. Knowing that you won't have to live off food stamps if you lose all your money in day trading actually helps you focus better because the psychological strain is less acute

To be a good, profitable day trader, there really is no need to re-invent the wheel. If you follow in the footsteps of those who have met with success, you have a much higher chance of doing the same. Use this knowledge to your advantage and be brave, but prudent at all times.

Ted Idea Worth Spreading

Basics of Commodity Trading

You must first know what commodity you are trading, which means that you have to do enough research so that you know everything there is to know about it and how it moves in different economic situations. This will allow you to track the maturity of the commodity, how its demand curve will move along as time goes by and what other developments might either hinder or help its growth within the business and economical market.
This is applicable to both business to business as well as specialist, or consumer products and commodities that are up for trading on the investment floors all over the world. Here information is your best friend because you can recycle the raw information and derive a strategy based on that. Just knowing the price movements and previous market psychology is not enough when looking at the specs of the commodity that you are trading. Where is it going? What factors would stall or increase its demand potential? Is it technology based? Does it follow the normal production and advancement cycles that most commodities have? Are there alternatives to it in the making?
These are the questions (some of them) you need to be asking. Basics of commodity trading really is basic knowledge of the commodity itself. We have not even gone into market physics and how market players interact with potential situations. These are the deliverables and collectible information you need to process in and out of your investment day. With this, trading will be a slightly less complicated game to play.

Nifty Intraday Chart 31-03-2009