What Makes The 'Winning' Traders Different From 'Losing' Traders ?

Well, Stock trading can be highly profitable if a person is willing to set a trading plan before placing his first trader order with real money. At the same time, without a trading plan, the stocks trading can be highly risky as well. 

So What makes a 'Winning' trader different than a 'Losing' trader?

The answer is Wining traders simply follow a definite trading plan consistently. 

So, What is Trading Plan?

Trading plan is nothing except a psychological planning of your future trades. The planning is not only related to a specific stock but the way a person would choose stocks, how much money is he going to invest in them, what type of stocks he's gonna buy, what will be his/her stop loss limits, et cetera. 

Without a trading plan, a trader is only a gambler. Trading of stocks or cryptocurrencies are not so different from Gambling if a person indulges in them without prior knowledge or a trading plan.

This is commonly seen that most of the traders loses money while trading stocks and only few of them makes handsome amount of returns. Why is that?

Because the 'Winning' Traders follows a definite trading plan. Let's describe it in few steps:

Know The Fundamentals 

If a person is trading stocks, then first of all he must have a sound knowledge of the fundamentals of a particular stock he wants to invest money in. Knowing a company where you're putting your money is very important. Because without  knowing the fundamentals, you won't ever know the potential of that stock. And if you're trading blindly without knowing the fundamentals, then believe me it is not trading, it is just only a blind gambling. 

Know company's past profits, read annual reports, get an understanding of profitability ratios includes in the fundamental understanding of a company's stock.

Set Profit Goals

Even after knowing the fundamentals, the work is not done. Now one must set a goal about his investment. This goal further be divided into:

• profit per trade
• profit in  a particular time-period (let's say 6 months)

One must have to decide this profit goals before investing his money into a stocks. Because without setting goals, you might stuck in a stock indefinitely, eventually come in loss.

Put Stop-Loss Order

One must put stop loss in each trade. As we all are aware of the volatility of stocks and crytpocurrrencies market, putting a stop loss is highly important. Because stop-loss limits your risk in a particular trade. Let's just say, you bought some stocks at $4.00 and you're highly certain of this upward movement but unfortunately stock started to move downward, then stop loss will limit your loss by automatically cancel your trade when the price reaches to the set stop loss order. Generally, one must put a stop loss order at 2-3 % down at the buy price. 

Keep A Check On Emotions

Controlling your emotions is of the utmost importance. Emotions are the most crucial reason of a 'Losing' trade. Never caught in emotions while trading stocks. Emotions like anger, hope, greed, regret have no meaning in stock market. They don't exist. All you have to do is follow your specific profit goals. Take your fixed profit percentage from each trade and never expects more than that. 

Never look at the trade after you got out of it with a good profit even if it keeps on climbing high because it would make you regret of your trading pattern and eventually you will suffer a loss in your further trades.

Never Think Of Becoming Rich Overnight

Never think of becoming rich in short term. 'Rich' is a relative term. Instead, focus on increasing your finance. Try to focus on consistent trades and take small profit with each trades. If you set a higher profit expectation, then you're destined to be in immeasurable loss eventually. 

These are some core points which a person should keep in mind if he wants to trade stocks profitably. 

Trading is not impossible thing, but making a consistent profit requires a high degree of control, proper knowledge and a consistent trading plan. 

So, if you're a trader or trading evangelist, then make sure you read this article with deep intention so that you can change whatever you're doing wrong in your trading activity. 

Thank you.

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