I have received many questions from traders asking what is the secret to be a profitable trader. Based on my experience, besides having good trading strategy, you need to have good trading habit for your daily routine. This is because having right habits is also one of the building blocks to success, whether in trading or life.

Trading Habits #1: My attitude to trading is important

I believed every trader at some point of the trading career had read books about other successful traders. Many traders do so because they want to learn trading philosophies or strategies these traders are using to make money. This is not wrong. However, many traders missed out on another important lesson: attitude towards trading. I've read a few trader's biographies and they mentioned they are not greedy, impatient, always wait for the best trade and etc.

Hence the first important habit is: my attitude to trading is important. To be a successful and professional trader, you need to think and act like one. Do not be greedy and enter the market early without confirming your trading plan just because you want to earn that extra few points of profits. If you do so, you are actually walking into market traps set up by professional traders and thus you suffered unnecessary losses. Therefore always wait for a clear signal before you execute the trade.

Even if you have a winning strategy, you will still suffer losses if you don't have the right mental skills. If you are unhealthily fearful of losses, you will not execute a high probability trade when the market shows it to you. If you are greedy, you will try to predict your winning strategy and enter the market too soon, only to find out that the market changes another direction. It is your right attitude towards trading that help you to properly execute your trades.

Trading Habit #2: There will be losses, I must accept it

No trader in this world will make every trade a winning one. If someone showers you with promises and guarantee returns of XX% every month, he is a scammer. This is because losses are definitely.

Every genuine successful trader in the world accepts the fact he or she will suffer losses. Hence they put a lot of efforts in risk management as well. They always trade on a good risk to reward ratio and always keep their losses small. Besides that, they have a positive attitude towards their losses and do not get depressed. So, do not be depressed if you suffered losses, everyone suffered it too.

As long as a you have practice good risk management you will easily recover your losses when the markets gives you a nice trend to profit on. It is how you approach these losing trades that will have a significant positive impact towards your trading performance.

Trading Habit #3: Trading is about edge

There is nothing 100% stone cold guaranteed in trading. And if this trade is a losing one, does not mean the next trade is also losing one. Trading is not a 100 meter sprint. What matters the most is finding a high probability setup and good risk management strategy, so you have a trading edge in the long run. There is a conservative example:

You suffered 17 losses and only 8 wins, with a winning rate of only 32%. Yet you managed to earn a 17.5% return from your $10,000 account. A pretty good return if you ask me. The "secret" is good risk to reward ratio (risk management) and a trading strategy which allows you to capture high probability trades.

Another way to explain about edge is football, specifically: Ronaldo and Messi. Both are excellent shooters of the ball and statistically and logically both have to attempt to shoot the ball an average 3 or 4 times just to score a goal. For every goal they scored, 2 or 3 shots could have missed the target or saved by the goalkeeper. It will be ridiculous for them not to shoot just because they fear these. Instead they are both confident in their abilities and that is why they always take the chance to shoot. In the long run, they will score the goals needed to help their teams win the game.

Likewise you will be a profitable trader as long as you trade on good risk to reward and good trading strategy which together give you a good trading edge over the long run.

Trading Habit #4: I will not interfere with my cut loss order

Once you had entered your trade and set up your cut loss order, you should sit back and let the market run its course. When the market goes against you and you had some unrealized losses, you should not ever shift your cut losses just to have "breathing room". If you do so, you are actually risking more money when the market eventually changes it's trend. In addition, you are actually being biased and you will missed another opportunity to profit from an entirely new trend if you interfere your cut loss order.

When the market nearing your cut loss order, just let it be. This is because you want to keep your losses small and easily recoverable.

Of course, this does not mean that you should not trail your stops. When you on a right trend and enjoying huge unrealized profits, you can trail your cut loss to either break-even or "in-the-money" to protect some of your profits.

Trading Habit #5: I will not in front of the PC every minute

Another thing you must no do is to be in front of the PC every minute and watch the market movements "live". This is because your heart rates will goes up and adrenaline starts pumping it when you see the market swings up and down. You will then influenced to make unnecessary trades and thus exposes yourself to unnecessary risks and losses. Furthermore, you will interfere with your trades and unnecessary change your entry and cut losses orders if you saw the market moving up and down.

You do not need to be in front of the PC every minute to find high probability setups. You just need to patiently wait for the market to show you. I usually check the charts every few hours to see any buy or sell signal. If there is no signal, I will go back to writing articles or reading books. As a result, I did not interfere with my trades and thus able to consistently trade well. You should too, pick up a good hobby or focusing doing your daily errands or job. I believe your trading performance will improved a lot and you would have a healthy and balanced lifestyle.

Trading Habit #6: I will not be influenced by market noises & market news

If you have been following my articles and blogs, you know that fundamental news and market events are huge waste of your time. This is because you cannot determine whether this piece of news will give us valid trend reversals or meaningful trade decisions. The only thing they give is a brief spike up or down.

Besides that, these news and events will cause you to over-analyze, over-complicate things and chances are, you will make the wrong decision. Hence they are called market noises, which causes you to lose money. So do not have this bad trading habit of following & analyzing every fundamental or market news there is in the world.

However this does not mean that you should totally ignored important fundamental news like a central bank's interest rate decisions or elections. Such news will cause volatility to the index futures or currency pairs that we trade. Instead we practice risk management and do the necessary to protect our trades during these announcement, NOT executing trade entries. These topic will be covered in our risk management part of our program.

Conclusion

If you want to be a successful trader, having good trading habits can significantly help you becoming one. What we learned today in this article are one of the many things we successful trend followers had been doing all these time. Shall you interested to join our ever growing community of successful traders, feel free to join our lifelong Intensive Futures Program.  Or you can sschedule a Free strategies consultation with me.

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