Mindset of Winning and Losing Traders

When trading brings good results, traders feel excited, however, when something goes wrong, a mere trade may become a nightmare. It may take months to earn capital and it may take a few seconds to waste it all. It happens and happens with another generation of traders, thus, if a trader is aiming at attainment success, he is recommended to study carefully experience of the predecessors drawing his own conclusions in order not to commit similar mistakes again and again. This article gives several observations revealing difference between a winning trader and that one who makes losses.

Observation 1
The majority of traders lose funds in short-term trading. The reason of the defeat is not a short time frame. It is rather lack of proper education and lack of elaborated trading strategy. Such traders are also featured by low initial deposit. Winning trades prefer medium and long term strategies as they do not involve frequent spreads. And their starting deposit is much larger.
Conclusion
Statistics shows that medium and long term trades become more profitable. Besides, those traders who have bigger initial capital have higher chances to survive periods of volatile market.

Observation 2
A losing trader often relies on automated trading systems and indicators with no understanding of principles of their functioning. They do not waste their time on studying mathematical algorithms and suggestions different from publically accepted. Winning traders spend their time on complete understanding of market mechanism and all its processes.
Conclusion
Beware of functioning principles of every tool you use. Study it before implementing.

Observation 3
Losing undisciplined traders waste their time on predicting where the market will be tomorrow. Winning ones would think of how others will respond to the processes currently taking place.
Conclusion
Success in trading depends on an ability to foresee what market reaction will be caused by an event. Being a winning trader would probably be more difficult than becoming a prosperous analyst as traders would follow any market direction seeming to be profitable.

Observation 4
Losing traders are often unable to assume and control their emotions. They appear to take no responsibility of their actions. Lack of discipline and extreme emotions prevent them from concentrating. Thinking traders ignore emotions or direct them into the right way.
Conclusion
Emotions in trading should not be completely avoided as it may lead to mental diseases. Proper control over emotions is needed to guarantee success.

Observation 5
In the event of a defeat a losing trader buys another book or trading course and starts everything from the very beginning. Thinking traders in case of losses try to find out what exactly happened and adjust their trading strategy according to the current market situation. The best traders follow the same strategy making only necessary amendments when needed.
Conclusion
It is recommended to possess a sole trading system and to use it permanently. Such a system should have proven to be reliable. Even a poor plan would be better than continuous shifting of trading systems.

To conclude all the above-mentioned observations, both winning and losing traders treat trading as a game. However, for winning traders this game is not an amusement, but it is a kind of vocation. In trading we deal with the market and with ourselves. As a weapon trading may bring either profit or harm. Therefore, every trade should be carried out with professional degree of prudence.