The psychology of successful traders

To become successful in the stock market you feed an edge over others. So what is the edge that helps to become a successful trader? The edge we are discussing today is the combination of fundamental and technical analysis together in the stock market. Our definition of fundamental analysis is the search for the true value of the share. Definition of technical analysis is the study of trends and turning points.

We will find the shares that are undervalued, shares growing their earnings aggressively, the stock should be in a stock uptrend, and we will buy the share when the general market is rising. That is what going to work and we need to stick to it.

Those of you trading for a while will know that sticking to a simple set of trading rules will be difficult because simple is the most difficult and boring thing. To make money from the market in any timeframe we need three things.

1. A method
2. Manage our money
3. Manage ourself

A method

Let's play a special game. So here a game 

1. If you can predict the outcome of tossing a coin I will pay out twice as much as you are prepared to bet.
2. If you win 1 round I will payout Rs.2. If you lose 1 round you will pay back rs 1.
3. This is the only method you can earn money from the stock market consistently.
4. Because this system guarantees you when we start to play a game you will earn 50 paise every time without fear 
5. In trading, the number of times you are right is known as the hit rate
6. In trading, the payoff is known as the risk to reward ratio.
7. The money you make is a function of both the hit rate and the risk to reward ratio.
8. There is four fear in stock market 1. losing money 2. Being wrong 3. Missing out trade 4. Leaving money on the table.
9. Most of the traders focus on the system with a high hit rate. But with a 50 % hit rate and 1:2 risk to reward ratio, we will make money.

Important questions for retail investors you will find all the answers in the blog

1. Do you plan your trade before the market opens?
2. How important for you to calculate your risk?
3. What is overtrading?
4. What was the motivation you become the trader?
5. Do you have the explanation for your trade decision why you buy or sell?
6. Do you have any trading strategies?
7. What is the success rate of your trading strategies?
8. How you avoid the emotional trap?
9. Do you identify the driving force for the market?
10. Do you try to hide your losing positions and show your winning position?
11. How you react when your trade goes against you?
12. Do you try average losses?
13. Do you decrease your trading volume when you are loosing?
14. Do you increase your trading volume when you are winning?
15. When did you decide to cover your positions?
16. Do you have a trading system for trading?
17. What percentage of your trade is based up the trading system?
18. Do you have any trading rules?
19. Smart money vs Dumb money in the Stock market
20. The truth of the brokerage industry, Trading expert & retail traders

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