20 Habits of Wealthy Traders (Part 2)


11. Realise the market will be open tomorrow

Totally concur. *Warren Buffet “I never attempt to make money on the stock market. I buy on the assumption that they could close the market the next day and not reopen it for five years” (Sure Dividend 2016)

12. Never add to a losing trade, never

This is false. Average to great Value investors always buy more stock when it’s decreasing in value to average-down-cost of their holding. If their analysis is correct, then the stock will realise its internal value. Those stocks that were bough when prices were falling will now be perceived as a bargain

13. Judge their trading successes on anything but money.

Some do. Some don’t. Evidently… we are all unique.

14. Read about mobs and human psychology

Most traders and investors will come to realize that trading is mostly a game of human psychology. People create the market and so the market moves and thus caused by people. Understanding human psychology is well-documented and proven to increase traders’ track record.

15. See themselves as market makers.

The big institutions that have enough resources can. The minor capital funds do not.

16. Practice reading the right side of the chart instead of the left.

Some do. Some don’t. Whatever works for you…

17. Have an edge in the market.

This is absolutely correct. The edge is what distinguishes the difference between average traders and great ones.

18. Determine position size based on risk; not round numbers.

Mostly agree; but either can be used to determine position size amongst many other processes.

19. Buy strong markets and sell weak markets.

Again, it depends on what one means by strong markets and weak ones. Value investors perceive the investment world in this way; therefore they agree to this rule. However, it is totally irrelevant to Trend traders.

20. Play the action, not the news

Wholeheartedly agree.


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