The 5 Laws of Highly Successful Traders

When we follow the laws of the road and decide to drive within the speed limit we stand a better chance at avoiding mortal danger; effectively you are increasing the odds of an increased longevity. Similarly, there are beneficial laws in the world of trading. Few would argue following the laws of a successful trader is a bother when the end result may directly effect the balance in your account. I invite you to take a look at what these laws are, and how they might make a positive impact in your life as a trader.

Law #1: Know Yourself

To understand your strengths and weaknesses, taking a chance each day to look at yourself with complete honesty. To know yourself is to take a step away from the vast world of inner turmoil so many traders both expert and novice experience. To know practice knowing yourself will bring realization that regardless of what happens in the markets, you are still the same person. Often times one will experience confidence when winning, and a deflated sense of self worth when losing. This is the general result of not knowing ones self. When you know yourself you will be well aware that the person you are remains the same regardless of the wins and losses you may experience on a daily basis. To know yourself is to be free from the emotional turmoil often associated with day trading.

Law #2: Don't Rush In

If you've ever been in a rush you'll notice in hindsight that your powers of observation decrease. Without a moments notice the world goes passing by you. Most times when trading you may find that you're in a rush to catch the next big trade. More often then not rushing into a trade is the wrong course of action, for many reasons. The need to rush is an indicator that you are not well prepared, your disposition when trading should be like that of a Tiger laying in wait for its pray. However many people emulate the nature of a Rat scrambling desperately to capture its fair share of the cheese. When you feel comfortable and confident that you're strategy is well prepared then you may lay in wait. Opportunity will always come your way, but when you rush in there is a greater chance it will pass you by without a moments notice.

Law #3: Know The Future

Are we expecting too much of ourselves by demanding that we know the future? Some may say yes, however as a trader this should be one of your aspirations. Our goal is to bring future events to fruition. When we take on the task of knowing the future, as contrary as it may seem it's easiest to think big. For instance, setting a goal 1 year into the future and making it your prime objective to bring this goal to realization would be a good start. Making this goal reasonably difficult yet not necessarily an unrealistic task would be an even better start. Dedicate your efforts to achieving this one goal and put aside the trivial day to day goals that often distract so many traders from their primary objective. Accomplishing in the evening that which you've set out to do in the morning is knowing the present; accomplishing in 1-year that which you've set out to do today, is knowing the future.

Law #4: Find a Mentor

Be aware that you are not the only student of these laws, that there are others who may have already achieved excellence in the laws which you are presently attempting to master. Being aware of these individuals will afford you the opportunity to receive invaluable tips. The principles of these laws are exercised in many fields outside of trading, become a student of those who have come before you may cut a substantial lot of time from the learning curve of your professional career as a trader.

Law #5: The Market Is Your Friend

To imagining that you are waging war with the market day in and day out in order to achieve some level of financial gain may leave you feeling torn and tattered on certain days. The metaphor of war with the markets leaves you in a zone where you are surrounded by enemies with superior intelligence in a battle-field where the odds are always stacked against you. If you can learn to befriend the market then you'll find you've gained a valued friend and a great teacher. When you free yourself from the concept so many have of "war with the markets" you simultaneously free yourself from the feeling of "Winning" days and "Losing" days. In effect, you gain immunity from the feeling of being a loser. In it's place you've gained a friend that will always tell you where there might be room for improvement.

These 5 Laws should rather be labeled suggestions. Remember that success is an option, it is not a requirement. The most useful of tips will often be applicable to multiple areas of your life, it's popular often days to look at the markets as a reflection of the world we live in. Achieving proficiency as a trader will issue forth a ripple effect often effecting other areas of your life. My hope is that you enjoy these tips and the benefits they will render within and around your professional life.