8 Habits of Winning Traders

8 Habits of Winning Traders
July 12, 2021 Jared Martinez

Jared F. Martinez (The FX Chief™) is an author, forex mentor, educator, market analyst and entrepreneur, as well as the founder of Market Traders Institute, Inc. (MTI).

Successful people don’t believe that everything that shines is a diamond and everything that glitters is gold. If they think something looks promising, they look at the opportunity for what it is. They are not driven by out-of-control emotional greed and are not tempted to act before properly planning ahead.

As money-smart people do their due diligence and look at all their options as well as opportunities, their number one focus is to ask “How much will I lose if this opportunity does not work out?” They quantify a potential loss before they get involved. They attach a dollar amount to the opportunity along with a deadline, and whichever one is hit first they are disciplined enough to get out and walk away.

They refuse to attach their emotions or self-worth to any financial opportunity. When their idea or opportunity does not work, they don’t keep going deeper in the red. They get out and move on. They learn to financially protect themselves in everything they do and it becomes a successful habit that serves them well during the course of their life.

Savvy investors look at capital preservation first. They say, “I know what I got, I don’t know what I am going to get.” They look at the potential risk by asking, “Should things not work out then how much of my capital will I lose?” Smart traders look at tax consequences second and return on investment last.

Ignorant, greedy investors look at returns first and will always say, “I am not worried about taxes. After all, this will work out and I will have plenty of money for taxes.” And they look at risk and capital preservation last. Bad traders are just sure this deal is going to pay off, but then what happens the majority of the time? Loss of everything.

To become a success at trading, you must learn to always create a trading plan and then trade your plan, protecting yourself in every trade.

Here are the 8 habits of winning traders.

  1. Be proactive and create a trading methodology that works for you. Choose a trading method that you understand well. MTI’s Ultimate Trader’s Package has mentored thousands of students on how to effectively trade Forex.
  2. Use the right trading tools. Get access to MTI’s state-of-the-art charting software. Become familiar with it before you trade.
  3. Analyze your currencies and choose the market direction. The first responsibility for any trader is to first figure out market direction before you trade.
  4. Wait for a setup. Be patient and wait for the setup. As you are patiently waiting, watch the market and review the if / then approach. IF the market is going to do this, THEN I am going to do that.
  5. Create a trading plan. MTI has several very effective trading strategies for trading the Forex, all with pre-trade checklists and trading plans. The focus of the pre-trade checklists and trading plans are to get traders to think before you act!

    You must think through all the details before you act. Most traders act before they think, that is what causes failure. To some people, thinking is the hardest work there is, which is probably the reason so few engage in it. But to become a good trader you must think first before you act.
  6. Address your emotions. Think through your emotions before you execute the trade. Trading in the market is an emotionally-charged arena with incredible highs and crushing lows. Like injured and exhausted athletes, traders must perform when they are hurting. You must practice emotional self-control in trading. You should work toward not having any emotion as you trade.
  7. Decide to be a day trader or long-term trader before you trade. Most traders fail to think through their trading strategy in advance. So they enter trades thinking they can achieve their trading goals within a few hours, which ends up taking a couple of days or longer.
  8. Trade your plan. Good traders are good because they have come to learn discipline, obedience and wisdom from the pain of living through their failure. Don’t be wishy-washy. Stick to your rules.

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