Ever wonder what the habits of great stock traders (my millionairestudents and I) are? What separates us from the 90% of traders who lose and what do the most successful traders have in common?
As it turns out, quite a bit.
While traders come in all shapes, sizes, and personality types, I’ve learned they tend to share certain habits which contribute greatly to their success.
So, are you ready to join the league of extraordinary traders? Start implementing these habits in your everyday life. They’ll make you more efficient and effective as a trader, which can help you gain success over time.
1. Focus on Learning Not Money If you make a habit of learning, then you’ll be sharing a habit with some of the most brilliant traders and investors out there. In fact, most of my newly minted millionairestudents began with smaller amounts than most and they focused on developing good trading habits as opposed to focusing on profits for the first 6-12 months of their careers.
Great investors agree…Warren Buffet, for instance, credits making a lifelong habit of learning as one of the keys to his success. As investor Charlie Munger says of Buffet’s success, “Warren Buffett has become one hell of a lot better investor since the day I met him, and so have I. If we had been frozen at any given stage, with the knowledge we had, the record would have been much worse than it is. So the game is to keep learning, and I don’t think people are going to keep learning who don’t like the learning process.”
Basically, what he is saying here is that if at any point either of them had done the equivalent of shrugging and saying “eh, I’ve learned enough now”, it would have been the end of their success. But by constantly evolving and learning, they have remained nimble and relevant in the market for years. The Timothy Sykes Millionaire Challenge can provide direction and education, kicking off a lifetime of learning.
2. Prioritize Saving Up. If you want to be a great trader, you’ve got to become great at saving. Saving a portion of all of your earnings should be a priority. Start making this a habit now, even if you’re trading with a small account. You’ll ingrain the habit, and it will serve you very well as you begin to attain more success…I know too many traders who taste success and they go on spending sprees only to then feel forced to make big trading profits to cover their expenses, and when you start feeling forced to make trades, you’ll inevitably do poorly so don’t make this mistake!
Why be so conscientious about saving? Well, that’s a good enough question. First, you’re saving for that proverbial rainy day, AKA when stuff hits the fan. It’s never bad to be prepared. Second, you’re slowly but surely working to improve your position in the market. If you reserve a big percentage of the profit you make on today’s trade, then tomorrow’s trade can involve a bigger investment and potentially reap bigger returns. Keep this going, and sooner than later, the amount that you get to keep and enjoy becomes bigger and bigger. This means that even while saving, you get more money to spend and enjoy.
3. Listening To Others. Do you listen, or do you just wait until it’s your turn to talk? If you’re among the latter group (and many people are), then it’s time to shift your mindset, because you’re missing a lot.
The fact is, when you listen, great things can happen. Actually listening to what someone says can help foster a greater connection, which can result in potential business deals and partnerships. But even more so, when you listen, you learn. You never know when someone might drop a nugget of wisdom that might inform a future business deal or inspire the idea for a trade.
One of my hotteststudents in the video below credits his success to listening not just to me, but to several mentors who give live webinars to students:
4. Networking With Others. Are you a social creature? If so, great: this can serve you well as a trader. If you’re not naturally social or tend toward isolation, it’s time to get out of your comfort zone and get yourself out there.
Networking can offer powerful benefits for traders. The more connections you have, the more likely someone will be to think of you when a business opportunity comes around, and the more you can learn from people who are successful. Surrounding yourself with an aspirational crowd can help motivate you, which makes you a better trader.
While social networking is important, be sure to invest the time and energy to attend actual networking events, too. While online connections are great, there’s nothing like a face to face connection. Get used to connecting with people, as this is a bona fide millionaire habit.
5. Following the news/trends. The most effective (and successful) traders have a well-established habit of following the news. They read the paper, they follow relevant blogs and podcasts, and they watch relevant TV programs. Following the news not only keeps you current, but it can tell you a lot about the state of the economy and what direction your investments might, should, and could take…you don’t need to stay glued to the TV, but no matter where you are in the world, be aware of big news and trends that can influence the stock market.
And by the news, I’m not just talking about the financial news. Often, following world events can prove informative, as well as expanding your horizons to include a more global view.
6. Meeting with a mentor. Most successful traders have this in common: they got to where they are now with help. They recognize that they don’t know everything. To that point, they’re dedicated to learning (as noted above), but they also meet regularly with a mentor or advisor who can give them more personalized advice and direction.
I act as a mentor for the students who are part of my Tim Sykes Million Challenge Team. When they have time with me, they are able to learn lessons on a more anecdotal and “real” level, which can be more informative than reading them in a book. I can level with them and tell them about my past experiences, and they can use that information to their benefit, avoiding some of the errors I made as an early trader.
7. Frequent analysis and adaptation. The minds of the best traders are always working. They’re always trying to formulate smart shortcuts and ways to streamline their money-making methods. If they had a successful trade, they don’t just call it good. They analyze what went right, so that next time, they can do the same thing, but even better.
At the same time, they’re brave enough to be honest about what they did wrong if a trade goes bad, and use this information so that they don’t do the same thing again. These frequent personal check-ins and the ability to self analyze are habits of great traders.
Becoming a successful trader takes a lot of work, but also a lot of self improvement and good habit cultivation. By making the habits detailed in this post part of your regime, you’ll be taking a proactive move forward in advancing your career.
So, leave a comment below and let me know which of these habits of great stock traders you have!