Successful Traders – Trading for the Long Term

What do you think is the no. 1 reason some people are successful traders and others aren’t?

I think people don’t understand that success is not a linear journey. Trading is not something that’s going to make you money every day, every week, every month, every year. Nothing is that simple and if it was, everyone would be doing it. It doesn’t matter if you invest in property. It doesn’t matter if you’re a fundamental or value investor. Warren Buffett does not make money every day. In fact, Warren Buffett has losing years, and sometimes he has significantly large losing years.

There are ways to manage trading to ensure you are in it for the long term and that you are successful.

Many people believe professional traders make money all the time. I’m sure there are people out there that do, but by the same token you can be very successful, and you can make a lot of money, and become very, wealthy without winning every day. It’s not necessary.

The eighth wonder of the world is compounding, and that’s how Warren Buffett has become so wealthy, not because he makes 100% returns every year. His annualized return over the last 15 years has only been about 8% or 9%. But over the last 40, 50 years it’s been about 19%.

There tends to be a stark contrast between traders. You’ve got the people who think to be successful you’ve got to be making 100% a year, and that’s just not true. They tend to be a lot more impatient, and want things quicker. In my experience, these people are the most likely to fail.

In contrast, you have the more mature traders; those who’ve been around the block, who realise that the secret to success is being there for the long term, not necessarily making a lot of money quickly but making money gradually and compounding their wealth.

When people start something new they tend to be excited and have high expectations. It’s the same when you go on a new diet, start a new job, start trading or take up a new sport. You start out really excited and motivated but at the first hurdle, lose heart.

You’ve been dieting but haven’t lost weight.

You’ve started playing golf but have a shocking round.

You start a new job and after the first week realise that it’s going to be the same basic routine everyday.

Or you start trading and have your first few losing trades in a row.

This is known as ‘the dip’.

Successful people will push through the dip, will use it as a learning phase, a time to practice and educate themselves. An average or unmotivated person will hit the dip and pull out. They’ll make comments like:

“This diet doesn’t work.”

“Golf is a dumb game.”

“My trading strategy is broken.”

Patience is the key. Decide now that you want to be a successful person, a successful trader, and chip away at pulling yourself up and out of the dip. You will be rewarded.

If you are ready to start trading, and are prepared to put in the effort to be a successful trader, then join the 2-week trial membership. You will have access to trading strategies, trading courses and chart research.