Cultivating successful day trader habits can be the difference between flourishing financially or floundering in your career…and I want more Millionaire Trading Challenge students, so please pay attention!
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Truthfully, the differences between the trader who is earning millions and the one who is constantly losing money are typically not that great, but these differences are important and career-defining. And typically, they boil down to your habits (or lack thereof). Simply put, great traders recognize the importance of cultivating money-making habits.
So, how do you recognize which habits are good and how do you, well, make them habits? Here, I’ll introduce you to 9 successful day trader habits, and give ideas for how to incorporate them into your routine.
1. Learning and re-learning the basics. When I observe a new student in the Tim Sykes Millionaire Challenge team making a habit of learning how to trade, I automatically feel optimistic about their future. By setting aside time to study, reading my guides here, and learning the basics of trading, they are showing that they are serious about becoming my next Millionaire Trading Challenge student. Setting up a solid educational foundation is crucial.
However, these habits shouldn’t go away after you begin trading in earnest. It’s a good habit for even established traders to go back and re-learn those same basics on a regular basis. Often, you’ll find that approaching the same knowledge from a place of experience allows you to understand it better.
2. Setting goals. One of the most vital day trader habits? Setting goals. Goals are the way in which you establish various finishing lines for yourself to stay motivated as a trader. I suggest that you have both big goals and small goals. The big goals are your long-term desires: to own a private island, a building in Manhattan, whatever. The smaller goals are the stepping stones that take you toward the big goals and keep you motivated. Setting specific goals and revisiting/adjusting them often is motivating, inspiring, and should be part of your regular routine.
3. Always Seeking more knowledge. This kind of spins off from the first habit, but it takes it further. The best day traders aren’t merely interested in amassing knowledge about day trading. They’re seeking knowledge about everything and everyone and using that knowledge to better their finances.
The fact is, you never know when some piece of knowledge might inspire a trade or investment. So as a day trader, I urge you to make a habit of obsessively following the news, technological updates, world reports, trends…everything. This is a day trader habit that will serve you well as you advance in your career and make you a more interesting and well-rounded person.
4. Daily scanning. It’s a vital day trader habit: you’ve got to scan the market for stocks and that’s why it’s imperative that you utilize this new stock trading software as it’s the best for spotting the best stocks to trade every day. Basically, this means that on a daily basis, you must make a habit of sifting through the many stocks out there and determining what stocks to trade.
Filtering through the many stocks offered can be overwhelming. Happily, there are many resources such as Stocks to Trade that can help you search and filter stocks using specific criteria. The ease that such resources bring to the process makes it easier to make this a habit.
5. Research. Are you researching constantly? If not, you may fail as a trader. If you had to develop just one successful day trader habit, I’d suggest making obsessive research a huge and important part of your routine.
Obviously, you want to research the companies you’re considering trading. But don’t stop there. Research the history of all the hottest stock market sectors and similar stocks to determine potential trajectories. Research the companies and the regions where they are located. Your research can make the difference between a successful, controlled-risk trade and simply rolling the dice.
6. Observing others. I urge my students in the Tim Sykes Millionaire Challenge to look at other successful Millionaire Trading Challenge traders for inspiration. I want them to see what I’ve done to attain success, as well as what some of my most successful students, like Tim Grittani, have done to earn a fortune all within a few years.**
However, making a habit of careful observation of others comes with a warning. You never want to try to copy what others have done. For one thing, it’s not reliable: there are too many factors at play to really replicate someone else’s success to the letter. Second, it’s not sustainable. Ultimately, by looking at others you’re not trying to copy them but to channel some of their habits into your own work so that you can develop your own trading style.
7. Self-scrutiny. Did you have a big trading score today? If so, make a habit of looking at the events that led up to it. Alternately, did you suffer a big loss today? If so, make a habit of looking at the events that led up to that, too.
Self-scrutiny of one’s trading habits, whether they lead to good or bad results, is important in fostering improvement. It’s a day trader habit that will help you continue to refine your methods, shedding the stuff that you’re doing wrong and cultivating the things that you’re doing right so that you can keep on getting better. Eventually, you may begin finding yourself winning more and losing less.
8. Socializing. The most successful day traders might be sitting in a dark room lit by their laptop most of the day. But when the trading hours are done, they’re making connections.
Making connections with other professionals is an important day trader habit to cultivate. Not only does it help you feel normal, but it can actually help your career. For one, you never know what relationship you have might result in a business opportunity or a way to diversify. But also, other successful people can just inspire you and give you ideas. It’s an invaluable way to increase your own income, in various indirect ways.
9. Maintaining these habits. How very meta. One of the most important day trader habits for success is…maintaining habits and consistency. Trading rewards routine; the best day traders realize this, recognize it, and as such, they make a habit to tend to these good habits that they have developed.
It’s easy to get lazy with your good habits and fall into bad ones. To really be successful as a trader, you need to make a habit of maintaining these good habits day in day out and when you slip up, recognize the slip-up and get back on track!
Mastering consistency and good habits like these are well worth your time as a trader, and it will contribute GREATLY to your long-term success. So, bookmark this page and ask yourself frequently if you’re really doing your best to become a great trader!
What day trader habits do you need to work on? List them below in the comments and let’s make it happen for you in 2018!