How To Become A Successful Stock Trader?

Stock trading is a profitable but risky practice. Stock traders can make profits amounting to millions of dollars from the market and also lose the same in a very short time. Stock trading is not for everyone, it is ideal for those with high risk tolerance, for individuals who can analyze the happenings correctly and make quick decisions.

You can find hundreds of pages on the internet detailing how to become a successful stock trader, offering tips such as diversification/specification, good stock screening/technical and fundamental analysis, position sizing, finding a suitable broker and system, minimizing risks, taking calculated risks, being patient, proper money management and trading discipline, avoiding greed, and so on. Here are some basic factors which make a successful stock trader recognizable from an inexperienced/amateur stock trader.



Success in stock trading depends on learning some market basics, including:

1. No trader can accurately predict the market, because no one can analyze all the forces and factors at one time.
2. The major force existing in the market is uncertainty; there is always a chance of some eventuality happening or not happening. There is also a chance of unexpected developments.
3. Traders calculate and bet on the greatest possibility of a certain development, with respect to the market/trading knowledge and market information they have.
4. You do not have to beat all others to be successful; you just have to beat some of them.

Both successful and other stock traders often make the right trading decisions with respect to the greatest possibility. Successful traders then hedge against all other prominent possibilities, but inexperienced traders often forget to do so.

Good stock traders are always careful to monitor the market trends and possibilities, to recalculate the possibilities and to make trading decisions with respect to a new scenario. But inexperienced traders make decisions which they think are right and stick with those, no matter what happens in market. They are very confident regarding the decisions they make until they suffer loss.

Market timing is another major factor contributing to trader success. Good traders make the right decisions at the right time. They enter and exit trades whenever the market possibility changes to/against their favor. But inexperienced traders make early or delayed decisions; and many of them want to follow the flow rather than make a flow.

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