Habit 1 â Accept What Is Real There are no experts in the trading game - full stop. Habit 2 â Think Common Sense Beware anyone who is selling information, unless they are willing to show you their private account, in which case, if you are so lucky to find such a person, expect to pay out big money for the information, in one form or another. Habit 3 â Gather Facts & Figures Read websites/forums (like this one) with an open mind. Do not buy any books on trading as the majority are available for free on the WWW if you are willing to search. They are not worth the cost of the recycled paper they are written on, read all with a pinch of salt. Habit 4 â Understand Risk Management Never risk money that you can't afford to lose, aka, "scared money never wins". Habit 5 â Plan Your Time Determine what time you have available and pick your style accordingly, aka, don't be a fool and think you can scalp/daytrade if you can't sit in a room on your own, be totally dedicated, and insist that you have no distractions from wife, or whoever! Habit 6 â Plan Your Trades Learn to be a small loser and a bigger than loser winner. Never be afraid to lose quickly, ignore this one at your own peril! Habit 7 â Become Good At What You Do Become proficient in one market before learning others, jump from Jimmy to Jack and you will stay on the trading merry-go-round, like most traders do!
As all those who have traded will know, there are many variations that can be applied to the 7even Habits. This is exactly why so many write books on the subject. From my readings of many books, they are all the same with a little bit of change put in here and there to make them appear "unique" This happens in all walks of life, not just in trading. For example, nearly all self improvement books can be traced back to a few key names that instigated such thought around the mid to late 1800âs in the USA. In trading, we have the likes of Livermore, Gann and many others over the years. I am sure that we have amongst us some Gann traders, Scalpers, Swingers, Positioners, etc, even some Exotic traders, now that one I really do like the sound of. The reality is that âone manâs loss is another manâs gainâ, so before one rushes in to trading, one should fully understand that the only guarantee in trading is that you can lose. The many psychological books on trading are of limited value, for many reasons, but the main one is that they do not prepare you for losing from the start. They will all tell you the importance of âtaking your lossâ, but will not, nor can not, prepare you. Taking a small loss all of the time is no good either, for it that happens, it is only a matter of time before you are washed out, and some call this the âfools goldâ. As like in the Gold digging era, the ones who made consistent profits were the ones who sold the pick axes, shovels and pans. Sure we had a few big winners, but the majority never found anything of real value. Be it known, those who did strike it big did so for a reason, as nothing happens by chance in our world, and that reason, even though it may not have been know to the discoverers themselves, was because those that struck big did not follow the crowd, they used their reasoning and logic to deduct what their best options were, whether it be getting in early, or waiting to see what strikes are registered in what locations. The only way for a new trader to prepare, is to, well, if it is not clear in the mind of the trader then the trader is obviously not ready. I think this is a fair comment!