What separates a winning trader from a losing trader is their right trading mind set.

Having the right trading mindset is an integral part of surviving in the financial markets. With the help of correct set of attitudes, beliefs, and habits, you will have a better chance of being able to successfully tackle the obstacles in the trading world.

To develop a winning mindset is not always that easy, Moreover, If you have faced recent losses than it becomes more hard to remain positive and to develop right mindset.

We have listed 10 important Principles of Winning trader mindset here, each of the principle below is important, but when they work together the effects are strong. Keeping them in mind will help in creating right mindset thus greatly increasing your odds of succeeding in the markets.

1. Develop and stick to a Trading Plan

A trading plan is a written set of rules which specifies a trader’s entry, exit, and money management criteria for each and every trade.

Develop your trading plan and backtest the trading plan using historical data and determine if it is viable. Once a plan has been developed and backtested which shows good results, the plan can be used in real trading.

The main key is to stick to the plan. Taking other trades outside of the trading plan, even if they turn to be successful are considered poor strategy.  Also, keep in mind that the plan must be adapted to your strategy at all times – so be ready to adjust it!

2. Don’t rush and be patient

Like any other business, rush in trading will also head you towards a certain demise. Even though you have good knowledge of trading, you should never rush for a trade or a day of trading. This way you cannot become a expert or senior trader.

A successful trader will always trade their last deal just as they did their first; with enough patience and constantly being aware of the possibility of losing. Winning traders are always patient when trading regardless of their portfolio and capital.

3. Trade like a business

Approach trading as a full- or part-time business to be successful. Don’t treat trading as a hobby or a job. If trading is treated as a hobby, you will not be committed to learn. If it is approached as a job, it can be frustrating because there is no regular salary/paychecks.

Trading is a business and incurs expenses, losses, taxes, uncertainty, stress, and risk. To trade like business, you are like a small business owner and you must do research and develop strategize to maximize your business’s potential.

4. Safeguard your Trading Capital

To save enough money for a trading account will require a lot of time and hence it is a better idea to protect the trading capital instead of doing it twice.

Do not risk your entire capital in a trade, keep a mark say maximum of 2% of your portfolio per trade. It is important to note that protecting your trading capital is not synonymous with never experiencing a losing trade. Every traders have losing trades.

Along with keeping a mark of certain percentage per trade Protecting capital entails not taking unnecessary risks and doing everything you can to preserve your trading business.

5. Risk Only Affordable Loss

Always invest the amount in trading that you can afford to lose. Thus save enough before starting to trade with real cash.

Money in a trading account should not be allocated for the paying the mortgage or to pay any grocery bills. Traders must always avoid to think they are simply borrowing money from these other important obligations.

Losing money is traumatic enough, It is even more so if it is capital that should have never been risked in the first place.

6. Avoid trading under pressure

Suppose for example you get a tip that says buying a certain currency will guarantee profit  , the majority of traders would just go for it.

Whereas on the other hand, The winning trader, will rarely trade based on tips and, most importantly, will never trade unless they feel it’s the right.

7. Always have a watch on the News

Social media can be a good friend for you while trading. However, you cannot compare blogs and online journals that talk about trading and the latest movements of the markets.

You need to ultimately spend half of the time in the trading world on reading the news and getting informed and thus planning your next move and investment accordingly.

8. Stay Flexible

It’s vital for a trader to remain flexible and consider experimenting from time to time. For example, you might consider using options to mitigate risk.  A best way a trader can learn is by experimenting (within reason). The experience may also help reduce emotional influences.

Traders should also periodically assess their own performances.  After reviewing their returns and individual positions, additionally traders should reflect on how they prepared for a trading session, how up to date they are on the markets, and how they’re progressing in terms of ongoing education.

This self assessment can serve helpful to a trader for correcting mistakes, change bad habits, and enhance overall returns.

9. Be ready to stop trading if needed.

There are mainly two reasons for stopping trade: an ineffective trading plan, and an ineffective trader.

A trading plan which shows much loss than were anticipated in historical testing is an ineffective trading plan. The reason behind this would be Markets may have changed, or volatility may have lessened. For whatever reason, the trading plan simply is not performing as expected.

Stay unemotional and businesslike in this scenario. It’s time to reevaluate the trading plan and make a few changes or to start over with a new trading plan. An unsuccessful trading plan is a problem that need to be rectified.

A trader who makes a trading plan but not stick it to it is called an ineffective trader. External stress, poor habits, and lack of physical activity can all contribute to this problem.  On facing such problem, a trader should consider taking a break. After any difficulties and challenges have been dealt with, the trader can return to business.

10. Accept Wins and loss in same manner

Beginner traders usually end up quitting the trading after their first big loss. Of course, that’s not the mentality of a winner.  The first big loss is only the first step towards countless future wins – but you have to know how to treat this loss/mistake.

Once a trader accepts wins and losses as part of the business, emotions will have less of an effect on trading performance. That is not to say that we cannot be excited about a particularly fruitful trade, but we must keep in mind that a losing trade is never far off.

The Bottom Line:

Trading is really a difficult game which requires a lot of time and effort to master. Only a few people become highly successful at it.

But remember it is virtually possible for anyone to develop a winning trader mindset as long as they are willing to make the necessary effort.

Put some thought into these principles and incorporate them into as many aspects of your life as you can. Trading is a fantastic teacher of life’s greatest lessons. Allow the trading journey to shape you into the person you want to become.