Five Essential Habits Seasoned Traders Build
By - Dan Raju, CEO at Tradier on Feb 22, 2021 at 9:04:56 AM ∙ Comments


Many types of traders enter the stock market every day. Some are managing funds for someone else, some are risk-takers, some are long-term savers, and some make all their income as day traders. Each of these types of traders interact differently with the market, but they all rely on some basic principles and practices in pursuing successful trades. These are five essential habits you should build if you want to grow as a trader.

They Create a Trading Plan

Whether they manage their own account or have someone else manage it for them, successful traders create a trading strategy that is specific to their goals. A good strategy should contain a set of rules that guides your entry, exit, and money management criteria for every purchase. It is critical that traders stick to the strategies they set for the chance of long-term success. For example, if someone makes a plan containing moderate risk but decides to invest in a highly volatile stock, they aren’t following their plan. Even if they made positive gains from the risky trade, there isn’t a guarantee that it would work out again.

They Capitalize on Technology

Trading is a competition, so it is important to have the right tools to compete. The other trader across the table is not working in your best interest. You can bet other traders are not sharing the best tools or technology they use for trading, so traders make sure that they or their broker are using the best technology on the market. Many trading platforms offer backtesting, option chains, and historical analysis to help investors feel confident about their trades. Also, many traders make sure to invest in a trading platform with a mobile app so they can monitor their account on the go. 

They are Constantly Studying the Market

Even the most successful traders consider their time as a trader a lifelong study. There are many variables that affect the market, like world events and unexpected industry trends. Traders keep up with this information to know where the market stands. If you approach trading with a focus on learning, you will only become a better investor. It is an ongoing process where you will learn something new every day. 

They Only Risk What They can Afford to Risk

As a principle, you should only trade with expendable income. Do not use capital meant for a mortgage or a child’s college fund. The money you put into the stock market is always running the risk of loss, so you should never borrow money from your nonexpendable income. Losing money in the market is common but losing money that should have never been in the market in the first place is much more painful.

They Keep Their Goals and Perspective in Check

Experienced traders recognize that losses and gains are both a part of investing. Emotions can run high when trading in the stock market. Making a fruitful gain on trade can give you an emotional high for days, and a loss can hit just as hard. Having reasonable expectations will help you keep a measured view of your investing goals.

The Takeaway

Keep these habits in mind when you start investing to make better-informed decisions and avoid unnecessary loss. If you are interested in opening a brokerage account, make sure to check out Tradier. Tradier offers access to real-time market data, options and stock-charting tools, and backtesting to provide you detailed insight into your trading options and inform your strategies.

You can find out more about opening a Tradier account here.

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