We all know the stock market is a very confusing, dynamic, ever changing machine. If you do not agree with this, trade for a month and a you will soon to be awoken to this.
Anyways, I am writing this post as an observation to what I have seen and learned over the course of my trading journey.
One of the biggest lessons I have learned along my journey is that the traders who are successful are the ones who have a process and a strategy to attack the markets. These people are the ones who know when to put on a position on and what it should look like at all times. These are the people who do not second guess their decisions. These are the people who do not care when they WIN. These are the people who other traders aspire to be from a psychological perspective.
So what is the key to be like these traders? Well, it sure isn’t knowing a pattern or two, it is much more than that. Personally I would say trading is 15% pattern recognition, 10% risk management and 75% psychological (Including execution, conviction, confidence, etc).
The patterns are a necessity but simply having that skill is no where near enough – anyone can see a head and shoulders pattern. The real successful traders are the one who have a black and white approach to a colorful environment.
What I mean by this is simply they know when to buy, when to sell, they are unemotional, they do not get excited or depressed. There are so many ways to attack the markets and the ones are successful are the ones who take a step back and realize they can’t do it all. They are the people who are humble, and accept the fact others will have different strategies and techniques.
They are the people who look at the market from a black and white point of view, they know what to do and when because they have a process. The traders who fail are the ones who try to take on too much color or take on too many techniques and not have a definitive laid out process to follow.