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Kindle Notes & Highlights
by
Sam Eder
Read between
November 13 - December 17, 2018
“Top leaders and traders share some common traits. In particular, they have a high degree of emotional intelligence and are engaged in self-study. They are able to formulate a plan that is right for them or their organization and stick to it with rigid discipline and confidence. Furthermore, when facts change and the plan needs adjusting, they are able to recognize this and adapt.”
the more important skill is emotional intelligence (EQ).
Basically, the better you are at controlling your emotions in the market, the more successful you will be. If you are here for the thrill of it, then you are unlikely to remain consistent over the long-term.
second finding from the study is that you need to learn to trust yourself.
When you are confident and trust in your Forex trading system, then you won’t have any trouble remaining disciplined in following your plan.
“CONFIDENCE IS ESSENTIAL TO A SUCCESSFUL TRADER.”
When dealing with a losing streak, Schwartz would trade a smaller size to make little profits:
If you can regulate your emotions and remain confident while practicing the beliefs of top traders, you will be more than just a successful trader; you will have awakened the Forex trading giant within.
By accepting that you are the ultimate determining factor in your success, you gain the ability to work on yourself and improve the way you trade.
They have clearly defined goals.
Top Traders Believe That Trading Is a Statistical Game and Understand Positive Expectancy Good traders know the outcome of any one trade is not 100% predictable. Rather, they seek to have a profit over a series of trades. Some trades are going to lose, and some will win. What matters is that, overall, the profit from the wining trades is greater than the losses from the losing trades.
But losses are a fact of life in the markets.
Accepting this fact is a positive thing. It frees you to create a trading plan that lets you move toward your goals.
he had not accepted the risk of a 25% drawdown on his account, he would have never been able to capitalize on the opportunity as he did. (This
One of their core habits is to identify the current market type first. Once they know what the current market type is, they adjust their strategy appropriately. Furthermore, they are aware that the market type could change at any time, and they are well prepared for the shift.
Top Traders Believe That They Achieve Their Goals through Position Sizing(Money Management), Not through Their Entries
Position sizing means knowing exactly how much you are risking on each trade, so you can achieve your objectives.
Successful traders know their goals and their expected performance and decide how much to trade based on this understanding.
Top Traders Believe in Having a Simple Entry Strategy
Top Traders Believe in Complex Exits
Top Traders Believe in Letting Their Profits Run
An oldie but a goodie. One of the habits of successful traders is to let their profits run.
If you are in a good trade, don’t be tempted to take your profit quickly. Use a method that protects your gains and at the same time allows you to capture big wins if the trade does go well for you.
Top Traders Believe in Cutting Losses Short
The flipside of letting your profits run is cutting short your losses.
Successful traders see losing trades as a “cost of doing business” and are quick to realize any losses.
Top Traders Believe in Understanding the Risk/Reward Ratio Before They Enter Into a Trade
Top Traders Believe That It Is Okay to Lose More Often Than They Win, as Long as the Profits from the Wins Are Greater Than the Losses from the Losing Trades
It’s not how often you lose that matters, it’s how much you make when you win.
Top Traders Believe in Developing a Mental Model of the Market
Top Traders Believe They Could Be Wrong and Are Willing to Adapt
