Save time, effort, and make more money realizing your full potential as a currency trader. I’m Jody Samuels, trader, coach and the creator of the FX Trader’s EDGE program. Welcome to The 10 Entrepreneurial Habits of Successful Traders
In the next several minutes I’ll talk about 10 habits that will help you take your trading to the next level. Our FX Trader’s EDGE Program teaches traders to use their entrepreneurial skills and habits to develop a successful trading business. How would you like to be in the top 10% of successful traders?
Habit #1: Establish a trading business for the right reasons Ask yourself what are your reasons for learning how to trade? Some of the most common reasons are self-management, financial independence and creative freedom. Many people are attracted to trading because it “appears to promise” more money, time and independence. They’ve heard that you can work from anywhere, any time. And you can. But you cannot become successful without dedication and hard work. It helps if you have a passion for what you’ll be doing, and your heart and mind are in the right place for doing it.
Passion helps us achieve our goals and make our dreams a reality. Passion helps us to think big. Passion takes us from good to great. Tiger Woods is one of the best examples of people who are driven by an incredible amount of passion. He has a rare intensity of focus on what he loves and believes in - golf and himself. Tiger’s passion has taken him from good to great. If trading is your passion, let it take you from good to great. Many people enter the trading business because they are passionate about making lots of money quickly, and they get excited by the thrills of the market. Passion is fine, but you must enjoy the process of getting there. You must also feel passionate about developing habits to follow your rules and sustain momentum. You must be committed and consistent. Are you one of those traders who have found consistency in a simple trading system and have become bored with it? Perhaps you are now looking for systems that are sexier and longer term? If you have a system that works, keep using it. If it ain’t broke, don’t fix it. As we just saw in the case of Farah and Stacey, it doesn’t take much to surf the net, only to find several websites claiming to show you a quick fix to currency profits. Avoid the technical traders trap! With the right education you will find success within yourself.
If you hear a voice within you say ‘you cannot paint,’ then by all means paint, and that voice will be silenced. - Vincent Van Gogh If your inner voices doubt your capabilities as a trader, just trade and those voices will be silenced. If you don’t have confidence in your ability to learn new skills and habits, who does?
Habit #2. Complete a Trader’s Business Plan What does it mean to treat trading like a business? For many people, trading is a hobby. For others, it is a business. Where do you fit in? If you want to make serious money, you must treat it like a business. Even if it’s just a part-time business. There are many aspects to building a business, as all entrepreneurs can attest to! But, imagine if you had a trading business plan which is your blueprint for success? Take that first step and make a business plan.
The purpose of the plan is to answer the four basic questions - what, how, why and by when? What are your realistic trading goals and objectives? 2. Define your trading tactics and strategies and the proposed method of action to meet your goals. 3. Why are you trading this year? What are the reasons for your business? 4. By when will you accomplish your milestones and targets?
The plan should be a holistic approach to trading. Think about incorporating the business plan into your daily life in order to really make it work. Sometimes trading can take over your life. By recognizing this, and being well balanced, you will be able to stay in the game for the long haul without experiencing trader’s burnout.
Habit #4: Commit to your Education and a Trading Coach Have you ever benefited because you took a course or graduated from a program? Have you ever had a mentor or a coach? How do successful performers structure their learning in any field of endeavor? Successful performers have a coach and build skills by studying and learning. Most expert performers have mentors at various points in their careers to help them learn and grow. Can you train on your own? Will you have structures to keep you on track and be accountable to yourself? Maybe. Maybe not. If not, take the quantum leap to keep you on track and achieve your goals as a trader. It’s too easy to get locked into your own head, your own ideas.
“Keep away from people who try to belittle your ambitions. Small people always do that, but the really great make you feel that you, too, can become great.” - Mark Twain It’s always good for a trader to mingle with other likeminded individuals. The stronger your team, the more successful you will be.
In step d assume you make half your target of 20 pips a day or 100 pips in the week. 20 pips profit trading $150,000 is $300 a day. Again, assume that number is $150 per day – that translates into $750 per week and $3,000 per month, which gives a monthly return of 30% on the $10,000 in the account. Since you are trading $150,000 worth of currency, your return on this amount is 2% per month. This is how returns are calculated among money managers, on the non-leveraged amount traded. E: you start over again by determining a new position size based on your ending equity. The beginning equity is $10,000 and the ending equity is $13,000. Again, we use the 3% rule and calculate the position size. 3% of capital ~ $400 ($400/ 20 pips stop loss per trade = 20 mini lots controlling $200,000) Your monthly profit = 400 pips * 20 lots = $8,000 but say you make half that! Now you add $4,000 to your account of $13,000 and you begin your calculations again with $17,000 in your account. As you see, the compounding effect works quickly!
Habit #6 Follow a System If you look at highly successful organizations such as Microsoft, Federal Express or Wal-Mart, you’ll find these companies are doing the same thing, the same way, every day, with consistency. They find a winning formula and adhere to it. Ask yourself if you have a winning formula to get that Trader’s EDGE. If so, are you executing that formula or system consistently so that you have the confidence in your ability to follow it?
You may have started out by going to lots of seminars, taking loads of courses, reading books, trying every guru’s system. At some point you need to stop jumping from system to system and take a step back, develop your own game, your own system. You will formulate what works for you. It’s okay to have a little coaching to give you ideas and point you in the right direction. There are two types of traders – systematic or discretionary and they are at opposite ends of the spectrum. A system trader will spend hours each day testing systems on several different markets. He might trade 20 different markets using a mechanical system, with very little emotion attached to individual trades.
A discretionary trader pores over charts, then makes his decision and watches the screen in order to pull the trigger for the trade. He still has a system, but there is a human component as well. He may not pull the trigger every time. Or, he may assign probabilities to the trades and only take ones with the higher probabilities.
The decision to go into systematic or discretionary depends more upon the trader’s temperament than on objective results or numbers. Whatever path you choose, you must learn as much as possible and grow into an expert in your area.
One of the most common causes of failure is the habit of quitting when one is facing defeat. Next time, think of the adage: “I’ve lost the battle but I haven’t lost the war!” Most traders quit before they give trading a chance, mainly because they lose their money. They want to make huge profits without understanding the business of making money trading. Don’t fall into that trap. Give it time. Time, perseverance and a strong desire to win is key to success!
Habit #3: Define your Goals In defining your goals answer the following questions: Do you plan to trade full-time or part-time? What time of the day will you set aside for trading? Try to fill in your calendar a week in advance and schedule in your trading times What specific goals do you have around daily, weekly and monthly profits or returns? Do you have certain metrics that you are tracking on a weekly or monthly basis? How do you define a successful trade? And finally, what trading strategy will you employ and what are the rules? I encourage you to really think through your specific goals for your trading business.
Habit #5 Understand and Exploit your Unique Trading Personality There are many different trading styles due to the simple fact that everyone is unique. Different personalities are better suited to certain trading styles. For example, if you enjoy sitting in front of the screen watching the market action, you may prefer momentum or day trading, looking to make 10-20 pips a day, like in the previous example. If you like to analyze the markets, establish your trade plan, and let your trade play itself out, you might be better suited to swing trades – you may set 3 different profit levels, and hold positions for 1-3 days maximum, and look to make 50-100 pips a week. As a long-term position trader, you are looking to make 200-400 pips a month. For this, you need mental stamina, patience and the ability to ride out drawdowns. There is no right or wrong style – the key is finding the style that suits your temperament and lifestyle.
“Seldom does an individual exceed his own expectations” Success starts from within… Believe you are worthy of trading success! Once you have taken this first step into your own personal belief system you have a better chance of succeeding.
Habit #7 Plan the Trade and Trade the Plan The path to greatness lies not only in our performance, but in the systematic practice we put into the performance. Trading mastery is a function of internalizing market patterns, rehearsing execution skills for trade entries and exits, and learning from the constant market feedback mechanism. Without a trade plan, our emotions get in the way. Traders run the gamut on the fear – greed continuum. Planning the trade and trading the plan is the practice we need to develop solid habits as a successful trader.
In reviewing my trades, I find that the more profitable ones are those in which I knew what I was pursuing. Even when they don’t work out, the losses are held to a minimum because I quickly realize that what I was looking for is not there and I exit to preserve my capital. On the flip side, all trades in which losses are far greater than they should have been have one thing in common. They all have an element of confusion and not knowing exactly what I was looking for in the trade. When you don’t know what you are doing, ie. You don’t have a plan, you let small losses turn into larger ones and then sell at the bottom or buy at the top just to get rid of the pain. Can anyone relate?
I created a Trading Blotter to Plan the Trade and Trade the Plan. The first thing I do is a checklist – top down approach – start with daily, go to hourly and then 15 minutes. I use the hourly chart for swing trades and the 15 minute chart for day trades. I look at a list of 8 indicators including the EW count, chart patterns looking for reversal or continuation patterns and check off whether or not the indicator is saying buy or sell. Assume 75% of the indicators say sell. I would consider that a high probability trade. Then I would plan the trade. That means coming up with an entry price, a stop loss, and profit taking levels. The object is to use it to execute the trade and remove all emotion from the decision-making once in the trade. You can create your own blotter with a checklist and trade plan. If you want to learn more about our trading blotter, see our complete menu of training modules.
Habit #8 Measure your Performance Elite performers such as chess masters and concert pianists study and practice to constantly improve. They relentlessly take notes so that no aspect of their performance is overlooked. Look at the performance metrics that professional traders monitor to figure out their strengths and weaknesses. Keeping score builds the motivation to continuously improve, and also tells you which areas need improvement. Why don’t you measure yourself against hedge fund managers or CTAs for fun! Track every trade you make and take stock every week or month..
And the day came when the risk it took to remain tight inside the bud was more painful than the risk it took to blossom. - Anais Nin Is it your turn to take risk and blossom? Only you can decide. But we are here to guide you.
Habit #10 Add Balance to your Life and Celebrate Progress Ask yourself the following questions: How does your trading fit into your life? What are your plans to simplify your life? What are your rewards if your trading is on target? How are you planning to give back to the community once you succeed as a trader? Do you have a life outside of trading? It is important that trading isn’t your whole world, and that you strive to achieve a work-life balance.
I learned the same thing from all of my trading masters in the mid 90s - that trading is a journey and through that I was embarking on a journey of self discovery. I didn’t quite understand what it meant back then but I do now and I can summarize it in one sentence – How I do anything is how I do everything. How I manage my personal life is consistent with how I manage my trading life. It’s not good or bad, it’s just what it is. When I develop certain positive habits in my personal life, those habits show up in my trading life. The reverse is true as well. So when my personal life is well balanced and I am centered, so are my trading results.
For example, when I am focused in my personal life, I am very focused in my trading. But when I am scattered personally, I know that I shouldn’t take my trading seriously because I am likely to be all over the map there as well. However, when I sit down to do the simple things that entrepreneurs do, that we discussed in this workshop, that’s when my trading goes well. How many of you can relate to that?
Habit #9 Learn the Secrets of Successful Traders Do you have drive, determination, patience and a positive attitude? When others throw in the towel, are you more determined than ever? Do you learn from your mistakes, and use these lessons to succeed the next time around? Do you thrive on independence? Are skilled at taking charge when a creative or intelligent solution is needed? Do you possess the needed mental stamina to withstand potential trading challenges? Do you believe you are worthy of trading success? If you answered “yes”, then you are well on your way! These are all entrepreneurial habits of successful traders.
What if I told you that there are certain characteristics that successful traders have, and that if you learned how to model them, you had a better chance of being successful yourself? Would that interest you?
Now we are going to do a short exercise. Grab some paper and listen. Good habits are indispensable to reaching our trading goals. It takes 21 days to ingrain a habit. What I’d like you to do is to write down 3 habits which you would like to work on over the next month for your trading business.
Once you’ve done this, pick a partner – it could be a friend, your spouse, or your trading buddy. Share with your partner the 3 habits you’ve selected and tell them which habit you are going to work on over the next month.
The first rule of focus is this: &quot;Wherever you are, make sure you’re there.&quot; - Dan Sullivan, Strategic Coach Founder &quot;I try to learn from the past, but I plan for the future by focusing exclusively on the present. That&apos;s where the fun is.” -Donald Trump These EDGE Success quotes are all about focusing on the moment. Take a moment and focus on what you hope to get out of trading. Set your business in motion now. Take action today.
Congratulations. You’ve taken the first step in your trading business. Act now and set up your Xforex account and a representative will contact you. Once you set up your account, please be sure to ask about our numerous educational programs. Remember: There are certain skills and habits that successful traders have Learning them will help you save time and effort, make more money, and achieve your full potential as an FX trader Phone Xforex at 1-866-936-7391 or 416-850-7885 today!
The 10 Habits of Successful
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