What Makes a Good Stock Trader?
What makes a Good Trader?
It is common knowledge that 90% of all traders lose money, therefore only 10% make money. That’s a pretty sobering statistic. So what makes that 10% different? What skills, knowledge and aptitude do they possess?
The key ingredients that are evident in all successful traders is a combination of; Analysis, money management and most importantly psychology. Throughout this course we will teach you all three equally important aspects.
Most successful traders follow the school of technical analysis, or reading the charts.
Technical analysis (TA) is the process of studying price movements from the past and using that information to predict movements in the future. The reason it is so effective is that it shows what the masses are doing; it’s a gauge of mass psychology. Where people are buying, where they are selling, and what the trend is among other things. There is no way of passing your own opinions and judgments on it. The Chart shows exactly what is going on in the market; the trick then, is learning how to read it. This course aims to teach you just that.
Technical Analysis can be used across any traded market and the signals are as relevant for google stock as they are for gold or oil futures. TA can also be used to analyse markets over any timeframe, be it minutes to years. TA gives the trader the ability to quickly and easily see exactly where a market is headed without the need to know what is making that market move. This gives the trader more freedom to study multiple markets without having to be; for instance an expert in biotech stocks.
Money management refers to your risk management and ability to financially buffer losses and ensures your portfolio is balanced. As a trader you have to realise that there is no holy grail of trading. All trading systems have losing trades. In fact, most traders have more losing trades then winning trades. The key then is limiting the dollar losses on the losing trades and maximising the return on the winning trades. There is an old saying in traders circles – ‘The best loser in the markets is inevitable the biggest winner over time’.
Psychology is arguably THE most important factor in trading. As a trader you will need to emotionally distance yourself as much as possible from your trading. This sounds fairly straight forward, but it is the most difficult part of trading. The ability to walk away from a trade that went wrong is critical for success. Again, learn how to take losses and accept them.
Throughout the course we will teach you the tools to analyze the markets as well as give you a firm grasp of money management and psychology, both of which are paramount in making you a successful trader.