Successful traders versus Unsuccessful traders
Coin Analyst Investments for the week ending starting June 09, 2019.
In this Week’s newsletter:
- Weekly Commentary
- Strategy of the week
In this Week’s newsletter:
- 3 major factors that separates successful from unsuccessful traders…winners from losers.
- Best way to deal with high volatility of Cryptocurrencies.
3 major factors that separates successful from unsuccessful traders…winners from losers.
When it comes to trading in general, there are three (3) major attributes that will always separate winners from losers, successful traders from unsuccessful traders. These attributes are necessary regardless of the market or security being traded and also apply in the Cryptocurrency market. They are consistency, discipline and patience.
- Consistency: In terms of trading, consistency is a goal that every successful trader strives for and must achieve. The reason for this is because when a trader settles on a particular approach to analyzing the market, she or he only requires to then trade based on the rules and/or guidelines that the system requires.
Doing this over a long term period, for example, 6 months to even a year will provide enough evidence (profit or loss) to help answer the following questions
(1) Is this a profitable way of trading the market or not?
(2) What is my average drawdown on trades using this system?
(3) How can I improve the system to even further perform better?
Until the above questions are answered, any system used by a trader to analyze the market is nothing, but child’s play and is only a matter of time before such a trader gets steam rolled by the market. For the infinite number of ways that a security or cryptocurrency (in this case) can trade, a consistent methodology to approach the market is an absolute must.
- Discipline: A major attribute of any trader that is successful is discipline. This also goes hand in hand with being consistent on how one navigates the market to find profitable opportunities. The discipline to execute trades according to whatever system or technique used to trade is required.
If a particular trade reaches a stop loss, successful traders have the discipline to respect the market and get out immediately, losers or unsuccessful traders hope and wish that the market comes back their way so they can exit the current position. There is however no room for hope or wish in the market as it truly is merciless in its purest form.
Discipline is also required to know that even if a trade does not work out, the market will always be there tomorrow to provide trading opportunities. This mentality is what makes one successful in the market versus the losing mentality which enforces trading after a loss to revenge or “get even with the market”. There is no such thing and such a trader will only become penalized by the market over and over again as their emotion is fully in charge and in the driver’s seat.
- Patience: As much as it is great to make profits from the Cryptocurrency market, a great attribute of successful traders is the ability to know when to “walk away from the market”. This basically implies knowing when the market is in a “giving mode” [trend], versus sideways [grinding mode].
“Grinding” here refers to the fact that the market can take away from earlier realized profits due to lots of false breakouts in a sideways mode that also requires paying the broker for each trade initiated, and on top of that, can frustrate a trader and cause lack of discipline. The best thing therefore to understand in terms of trading Cryptocurrencies is the value of patience.
Besides, it does require patience to wait for the right set up in the market based on ones trading system and also on the acceptable pre-defined risk to reward ratio. This is a huge component of a successful trader’s strategy.
Losers or unsuccessful traders on the other hand look to trade almost every wiggle on the chart to try and make money, which is nothing but a recipe for disaster. Successful traders on the other hand have the discipline to wait and then take advantage as soon as the market presents the opportunity [“giving mode”]. It is important to note and appreciate the following:
- The three attributes discussed above i.e. consistency, discipline and patience can be topics for further discussion and were by no means exhausted in terms of more work that can be done in each area to trade successfully.
- There are other key characteristics to becoming a successful trader which includes being able to control ones emotions, proper risk management, understanding various degrees of trends on different timeframes, timing and so on….these are topics and themes for latter discussion.
In summary, every successful trader on the planet has some element(s) of consistency, discipline and patience built into his or her strategy. Any trader that misses ANY of the key elements above will be unsuccessful trading Cryptocurrencies.
STRATEGY OF THE WEEK
The strategy for this week (for the purpose of discipline, patience and consistency) is to follow last week’s plan as all three Cryptocurrencies discussed (Ripple , Ethereum, and Eosio) are still in their “grinding mode” (non-giving mode).
Trajectories provided last week therefore are still in play (active). All that is left now is to let me market be the market. Updates later this week will be provided for all three Cryptocurrencies (Ripple, Ethereum and Eosio) should the market provide evidence to consider a different trading scenario.
This is not an investment advisory, and will not be held responsible for individual market positions; all trades that clients may take are based on their own final decisions. Coin Analyst Investments’ analysis is based upon information gathered from various sources believed to be reliable, but are not guaranteed as to accuracy or completeness. There can be no substitute for individual evaluation of market data. Our analysis is for informational purposes only. The reader accepts that by using the information, he or she will not hold Coin Analyst Investments responsible for any personal decisions.
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