What I Learned From the Best Investors and Traders in the World

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The very best traders and investors have certain common traits or characteristics that separate them from the rest. They have superior trading knowledge and the discipline to follow successful strategies, methods, techniques, and principles.

Proper Education is a Key
One crucial trait they share is the drive and perseverance to be the best. It takes years of proper trading education and experience to succeed in the marketplace consistently. Giving yourself enough time to learn is crucial to becoming a top trader or investor. Once you maximize your trading ability, the sky is the limit.

Psychology Can Take You to the Top
Confidence is vital. A world-class trader has this quality because they have developed an edge with their trading plan. They know it’s not essential to win or lose on any particular trade. The odds or probabilities are in their favor long term, and like a casino, they will become wealthy over time. Executing trades or getting out of trades is automatic with the best traders. There is no guesswork involved.

Implement Your Strategy
All top traders or investors use a methodology that fits their personality or trading style. For every trade they enter, the odds are in their favor. That’s because a position is only taken when as many factors as possible are in their favor. An analysis is objective and usually trend following in nature.

Education and More Education
Elite traders treat trading as a serious business. As mentioned before, it takes years of proper trading education to be a top trader. Doctors, lawyers, and engineers go to school for years before becoming professionals and earning a living. It’s precisely the same for traders and investors.

Cut Those Losses Short
Money management or risk control is the secret to success. It would be best if you always cut all losses short. Accept a loss when it’s small. Always know what you are willing to risk before entering a position in the market. Protect your capital. Risk only a small part of the total on any one trade, 5% or less. All top traders and investors use rigid money management. A great trader of the past once stated, “Take care of your losses, and your profits will take care of themselves.” No more valid words have ever been spoken.

Patience and Timing Are Major Factors
One of the essential traits shared by the world’s best traders is patience. It’s critical to wait for an excellent trading opportunity to develop. This waiting could mean watching markets for weeks or months. Wait for a clearly defined situation. Don’t buy unless the opportunity is exceptional. Another vital part of patience is to stay with a winning trade until you know the trend has changed. This patience should only happen through objective analysis according to your trading plan.

Think and Act Independent
The world’s best traders usually do not follow the crowd. The crowd tends to be wrong, especially at crucial turning points in the market. Think for yourself. Always try to avoid the pitfalls of responding irrationally to the crowd. An excellent example of this would be the dot.com fiasco early in 2000. The herd mentality caused many people to lose a lot of money.

Adapt When Necessary
The trading elite tends to be quite flexible in the marketplace and change as the market environment changes. These great investors recognize a mistake and correct it immediately. Top traders are always prepared to take alternative action if the market moves differently from expected. This important trait is the ability to adapt.

Emotions and Human Nature Can Cause Problems
All top traders and investors understand psychology when it comes to the markets. Many times the correct thing to do goes directly against human nature. Keeping emotions out of trading is vitally important. Don’t become over-optimistic or over-pessimistic. Have no ego. Consistently follow your trading plan.

It Takes Real Passion
Last but certainly not least is that all of the world’s best traders and investors love what they are doing. This passion certainly is a must.

Conclusion
Becoming great at anything requires proper education, a proper mindset, and a winning strategy!