The 18 Principles that Make Rich Traders so Successful

Trading in the market is like being in a Monopoly board game of ten total people and one person will end up winning the majority of everyone else’s money before the game is over. This is much like in trading where 10% of traders are profitable and the other 90% lose or just break even int he long term. If the 1 in 10 Monopoly winners consistently won game after game then you would want to know what they were doing differently than the other nine consistent losers. Well I do not know what the Monopoly winners were doing but here are what rich traders are doing differently.




PSYCHOLOGY

1. New Traders are greedy and have unrealistic expectations. Rich Traders are realistic about their returns.
2. New Traders make the wrong decisions because of stress; Rich Traders are able to manage stress.
3. New Traders are impatient and look for constant action. Rich Traders are patient.
4. New Traders trade because they are influenced by their own greed and fear; Good Traders use a trading plan.
5. New Traders are unsuccessful when they stop learning; Rich Traders never stop learning about the market.

RISK

1. New Traders act like gamblers; Rich Traders operate like a businessperson.
2. New Traders bet the farm, Rich Traders carefully control trading size.
3. For New Traders outsized profits are the #1 priority, for Rich Traders managing risk is the #1 Priority.
4. New Traders try to prove they are right. Rich Traders admit when they are wrong,
5. New Traders give back profits by not having an exit strategy. Rich Traders lock in profits while they are there.

METHODOLOGY

1. New Traders give up and quit, Rich Traders persevere in the market until they are successful,
2. New Traders hop from system to system the moment they suffer a loss. Rich Traders stick with a winning system even when it’s losing.
3. New Traders place trades based on opinions. Rich Traders place trades based on probabilities,
4. New Traders try to predict. Rich Traders follow what the market is telling them.
5. New Traders trade against the trend; Rich Traders follow the markets trend.
6. New Traders follow their emotions which puts them at a disadvantage. Rich Traders follow systems that give them an advantage.
7. New Traders do not know when to cut losses or lock in gains, Rich Traders have an exit plan.