14 Habits Of Successful Stock Traders

By Wilbert S

January 10, 2024   •   Fact checked by Dumb Little Man

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Lately, trading has become the newest craze in the world. Many people have dedicated so much to trading that they have quit their regular jobs.

And they still make a living! However, the smaller number of traders make the most money.

This is because they have spent years learning and building new habits. And these habits were what made them successful traders.

This article will look at 14 habits of successful traders and how you can use them on your way to success. However, you must know that these habits will require new traders’ hard work and dedication.  

The Habits of Successful Traders Who Invest In Stock Markets

Traders are highly skilled and have a strong sense of self-worth. Below is an essential list of traders’ most famous habits. It shares Apple’s stock with Amazon and Tesla. Why doesn’t the bank have any money? The value of the works is not affected by stocks. Those are cooler than Bezos. Start a priority.

#1. Test your Trading Strategy

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Many new traders want to attain success without developing a trading strategy. This is the first step many beginners should take to see future results. The key to successful trading is first thinking of a good strategy and then testing it out.

You always have to test it to know you won’t make a significant loss. So, you might be wondering how to test the trading strategy?

Many stock market simulators copy how the stock market’s environment works. However, the only difference here is that they let you use fake digital money. You will see whether the strategy will experience a loss or not.

You don’t have to invest real money to test the trading performance. There is another process for testing your strategy – Backtesting.

You can also use backtesting to see the past performance of your strategy. Although many tools can help you with backtesting. It is essential to know that just because you know that the past performances were successful doesn’t mean that they will be successful in the future.

#2. Stick to your Trading Plan

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Trading plans are written rules defining entry, exit, and money management requirements for each purchase by traders.

It becomes easy to test trading ideas and risk real money despite the new tech. Backtesting is an approach that allows you to apply a trading idea based on data from historical records to determine the likelihood of success.

Once a plan is developed and backtested, it can be utilized in actual business operations. Sometimes you have to trade a lot more than you can. Let them go. It’s essential to stay within your planned path. Trading without a trading plan is not considered as effective.

If you want to become the most successful trader, you have to have a good trading plan. The most successful traders stand out from the average ones because their trading plan is almost always centered around both risks and rewards.

Trading plans outline the investment stocks, the signals that tell the trader when to buy and sell and risk management methods.

#3. Don’t give into Emotion

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The most successful entrepreneur is a human being. They do not allow emotions to overwhelm them at times. These habits have always been every day for traders. It is essential to keep the team positive during a big win.

They also recognize that overconfidence is a significant problem because nobody is ever unbeatable. Those people always give up when they lose. So, they have a firm grip on their feelings, keeping their emotions balanced.

New traders are the most vulnerable to mistakes and loss, so focusing on hard work instead of your emotions will make significant losses much easier.

#4. Do your Due Diligence

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Using technical analysis tools will set the most realistic expectations if you want to approach trading. The best traders constantly analyze the stock market and know what’s driving it. Good habits include learning to predict the stock market direction and understanding how the price moves.

Most professional traders focus both on their understanding and the tools as well. Not just on one thing.

#5. Keep a Trading Journal

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We’ve previously covered trading journals. The earliest examples in a journal are the documents in which you track your trading. In a journal, you record trades you want or those you closed.

You should also note the first trade volumes and profit losses. Lastly, it would be best if you journaled what you want to buy.

The system is designed to allow you to record this activity. If your brokers do not provide this service, we suggest creating an Excel spreadsheet.

Learning to track patterns will help you understand the market and learn about trading. You should always list times when the trade was made, how much profits you’ve gained or lost etc.

#6. Always use a Stop-Loss Tool

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Generally, a stop loss represents a pre-determined risk the trading partner accepts for each trade. It may vary between a penny and a percentage, but in any way, it limits trading responsibility to trades.

Buying stops can help ease the anxiety associated with trading as it allows the user to lose only X amount on any given trade. In simple terms, it limits any potential losses.

I’ve never had any stop losses, but I’ve been successful in many trades. Exiting from stop losses and therefore having lost transactions is a trading strategy unless it meets the rules.

I’d recommend leaving any trade at a profit, but this is not true. Using a loss prevention system reduces loss and risk.

#7. Keep the Pulse of the Market

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Trading is not a hobby. It would be best if you treat trading as a business. Trading actively and regularly is what defines successful people. The best traders are human beings just like the rest of us, but the only difference is that they’ve made trading an essential habit in their life.

Using a stock screener and other monitoring tools, you will get daily updates about when it’s time to implement your strategies.

#8. Treat Trading Like a Business

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It would help if you considered the trade a job, whether part-time or a hobby. It is an exciting job. Getting paid at work is frustrating. Trading involves risks and expenses. The trader is essentially a small business entrepreneur, so he must analyze and plan for maximum business potential.

A successful trader spends many trading hours following a strict routine daily. You can never go wrong with investing in your trading ideas and treating them like a real business. Set realistic goals and save your profits for even more significant investments.

#9. Take Advantage of Technology and Tools

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Traders are competitive. There can be no doubt that the other trader will take advantage of the technology available.

Charts allow the trader to see the market from various angles. A backtesting method relying on historical data avoids costly mishaps. Using smartphones, you can see trade information at any time.

Technology we assume as a standard is capable of significantly improving trade performance. Technology makes trading fun and rewarding for traders.

Here are the most common tools a trader can use:

  • HALO Global – By using this stock screener, successful traders can find the exact trading opportunity they’re looking for in a matter of seconds
  • Trade-Ideas – This AI trading platform can be used to make the whole trading process automatic and even exploit market trends.
  • Motley Fool Options – This service is designed for people looking to trade stock options. Aside from teaching solid risk management techniques, it also teaches you successful trading strategies.

However, these aren’t the only tools in the trading community. Many aspiring traders search for tools that help their specific trading needs. Finding what tool works the best for you will contribute significantly to your success.

#10. Never Stop Learning

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Consider this as continuing education. Marketers have to keep learning every day. Understanding markets in their intricacies can take a lifetime. Hard research helps investors understand facts and what different economic studies mean.

Using focus and monitoring, a trader can enhance his instinct and learn the nuances of the trade. Global politics, news, events, and weather are impacting markets. Markets have dynamic environments. The more a trader understands the past and futures markets, the greater his chances.

#11. Don’t Take Losing Trades too Hard

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Even the best strategies can sometimes go wrong. The stock market can become unpredictable, and you should never blame yourself for that. Instead, if you happen to lose a bit of your investment, the loss should be a learning lesson.

Losing trade can often result in many more successful trades in the future. Because of this, you should learn the mistakes you make, which exacerbate losing money and do better.

#12. Get a Detailed understanding of Technical Analysis

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Trading is a highly technical procedure that needs the trader to find entry and exit positions for each transaction using charts and technical indicators. As a result, if you want to be among the finest traders in the world, you’ll need to master technical analysis.

#13. Limit Position Sizes

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Experienced traders know that they shouldn’t put all their trading capital in one investment trade. To avoid losing trades, make sure you put a little in each trade.

The most efficient market players are cautious about how much money they risk on each transaction, often attempting no more than 5% of their portfolio’s worth in any given position. This ensures that the trader rarely loses well over 5% of their whole portfolio value, even though the stock falls to zero.

When deciding on maximum position sizes, keep your risk tolerance in mind. Traders with a high-risk tolerance may set a full position size at 7.5 percent of their portfolio value, while those with a moderate tolerance for risk might put it at 2.5 percent.

#14. Know when to Walk Away

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Even if you have developed the best strategies globally, having a bad day is inevitable. That is why great traders need to know when to walk away. Every investment adviser will tell you that sometimes it’s a good thing to walk away.

Knowing when to stop investing in a financial market will reduce losing trade. Every trader knows that sitting in a dark room without having any exit points will only drive him to insanity.

Because of this, it is essential to take breaks and practice your other good habits.

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Conclusion: Habits of Successful Stock Traders

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It is far from challenging to be a successful trader. The trick is to develop good trading habits, remove emotions from the game, and treat trading as a business. Experienced traders examine every possibility and act only when their study indicates that it is the right moment.

These essential habits will make trades easier to understand and deal with. Successful traders know when to start and when to stop.

Habits of Successful Stock Traders FAQs

How successful is the average stock trader?

Most days are profitable, which means they generate substantial profits for their business. The chance of success is only 6 per 100 of the total. Success rates for females were even higher – 1%.

There is an average success rate of between three and four percent. A few other people had more income but little money enough to keep the business running. If success is described as simply proving negligible income over a couple of months, the chance of success is about 6-10 %.




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Wilbert S

Wilbert is an avid researcher and is deeply passionate about finance and health. When he's not working, he writes research and review articles by doing a thorough analysis on the products based on personal experience, user reviews and feedbacks from forums, quora, reddit, trustpilot amongst others.

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