Trading is the only profession in the world where no Prior Qualification are required, Any one with money and a Brokering account can come and trade in Stock market. But as we all know almost 90% of traders tend to bust there trading account.
Based on my Years of Experience in Financial Market Below are the few QUALIFICATIONS which are MUST to become a Profitable trader.
- PATIENCE Patience is a virtue, especially in the stock market and most essential qualification required for a trader. You must have patience to wait for the right trade to come, and not be impulsive to get in soon or to exit it soon. Once a trade has been executed and it starts moving in your favor, you must have patience to hold it until you are near exit level as per your trading plan. Never close a trade just because you have a profit; do not become impatient and get out for no real reason. Every act, either in opening or closing a trade, must be based on your trading strategy. There is no use selling a stock because you fear it is going down, nor buying it because you hope it is going up. Look at your charts/trading strategy and see which way the trend points and follow it. If no definite trend is shown, use patience and wait.
- Mental stamina/Conviction: Nerve is just as essential as patience; In getting my experience, I have been broke over 40 times, i. e., I have lost all of my money, but there never has been a time yet when I lost my nerve. Years ago, when I was experimenting and working on methods for forecasting the market, I would get in the market wrong and lose all my working capital, but I never let it get my “goat.” I studied very carefully how I made the mistake and what the cause of the loss was. In this way, I profited by every mistake and loss, and was enabled to perfect my method of forecasting and trading so that I could make a success. Looking backward brings nothing but regrets. I always believe in facing the future with nerve and hope. But let the nerve and the hope be based on some sound principle that will prevent costly mistakes of the past. During my career I have seen many traders who had made one mistake after another and suffered severe losses, and still had some capital to work with but when an opportunity appeared, they lacked the nerve to act. In cases of this kind, the nerve would have been more valuable than capital.
- KNOWLEDGE Experience is the only school to learn in and the burnt child is the one who knows the pain from having put his fingers in the fire. Mistakes are all right and hard to avoid. They are good for us, because if we profit by them, they prove valuable. But it is wrong to make the same mistake the second time. Therefore, use every mistake as a stepping stone to progress; analyze each mistake you make and the cause of every loss, in order to avoid repeating the same error in future. With each experience I had, good or bad, I accumulated knowledge, and after all, knowledge is the greatest power of all, for capital will always come to knowledge. Remember an Old Age Adage “You may be without cash, but If you Have Knowledge in the stock market is worth hundreds of thousands of dollars and in a short time You can turn that knowledge into cash.”