What Is The MUST HAVE Skill For Successful Traders?

university students

I’ve had the pleasure of training many students throughout my trading career and everyone of them always asks me what’s the key to being successful as a trader. Many of them will ask me if they need to be smart enough or come from a finance background. Or perhaps, they need to work harder than anyone else or have better luck. Well, it’s none of those answers. The answer is going to be different for each trader but what is the same is they all need to find their TRADER EDGE. What do we mean by that? Every successful trader has an EDGE meaning there’s something that each one of them excels at or they know, for example a company stock or sector much better than anyone else. Also, it could be perhaps a trading strategy that they know inside out and have executed it to perfection when the opportunity comes. Or it could be a familiarity on how a stock moves based on certain events. It doesn’t matter what it is as long as each successful trader knows exactly what he/she is looking for and executes it according to plan. Now that you know that you need to find your TRADER’s EDGE. How do you develop your edge? Here are a few steps to follow:

1. Find a company stock or sector that you have an interest in and try to find out as much about it as possible. For example, I have an interest in following Apple stock (AAPL) because I have a lot of Apple’s products. I generally keep up-to-date on what the company is up to and what new products may be coming into the pipeline. As well, I know when the company reports their quarterly earnings and upcoming events.

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2. Look for certain patterns or past price movements on the stock or sector you have chosen to focus on. For example, I noticed a similar trend in Apple stock when there’s a rumour of Apple coming out with a new iPhone. The pattern is the stock price usually rises before Apple announces the new iPhone and once it’s announced, the stock price usually falls. I noticed this pattern not too long after I started trading Apple and it has helped me make a lot of money.

3. Find a strategy that helps you take advantage of these repeatable patterns and put together a trade plan so when the opportunity comes, you know exactly how to profit from it. This will include your entry price, target price and stop loss price. As well, it will include the size of your trade position.

If the plan works then keep looking for the same trading opportunities. If it doesn’t then keep refining and looking for repeatable opportunities. They key is to find your competitive edge and profit from it.

Mike Ser