How to Become a Successful Trader

Hello, friends, This is Vijay Bhambwani. I'm back with you to discuss about a very critical aspect of the market. On 11 November 2021, I recorded a video asking you whether you are deciding to quit your job to take up trading and whether this is a very wise or an unwise step with the why behind what I was saying.

The fact that you're watching this video which is actually a follow up video to the 11 November video itself, means that you've probably decided to trade for a living. And in this video, I am going to share my two pennies my thoughts on what you will need to get there.

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Friends, I told you in my previous video that trading profits are the most difficult, easy money you will ever make. I really stand by what I say. Now, John Rambo, in the last of the Rambo franchise movies, said, 'What we do categorises us. But how we do it defines us'. I am very sure you want to achieve the best possible results in your trades and you want to achieve sterling success. So here goes. Let me share what I think from my point of view are the qualities you will need to succeed as a superlative trader.

The number one quality that you will have to have is discipline. If discipline is gone, believe me, your chances of success are way down low.

Discipline does not mean getting up at the same time every morning, switching on your computer, and starting to trade from the very first minute of the market. Discipline can also mean not trading just because the markets are either not conducive enough, your trade set up has not identified any trades, or the markets are too volatile and therefore to hostile to day traders.

You will not believe this but on my own personal prop book I have gone for weeks, sometimes, during very, very tumultuous markets, I have gone for weeks without putting in a trade. But discipline means that even though I may not be able to get a trade because the risk-reward ratio and the payoffs were not all that great, I was still sitting with my eyes dug onto my computer screen.

Now to keep going in spite of not getting a trade, will demand absolute amount of discipline from you. Remember, in personal life, there is a saying a broken engagement is better than a broken marriage.

Here, in trading, if you have to play cautiously, which in these markets, especially the present ones that you are seeing right now, it is better to forgo a very high risk trade, even though it might get you a small probability of success, it is better to forgo that kind of a trade, than to risk losing capital. Because if you lose 10% of your capital, say, five times, you're gonna wind up losing 50% of your capital. And from there just to get to ground zero, you have to make 100% on the remaining 50% capital just to get back to where you had started.

So discipline is something you need to adhere to. You can't trade just because I'm bored, I've not done anything for three, four, five days, let's trade today. This is not a game.

Number two, patience. This, of course, is again very critical. There will be times when you will suffer losses. Your job as a trader, of course, is to limit those losses, but there will be a string of losses. It's not just your fault. Sometimes the markets are choppy.

Patience means that you basically keep going, in spite of the fact that the markets are basically a little hostile, of course, you'll cut back your exposure. You will resort to financial risk management. But you cannot give up halfway through. That's not what you are here for.

Number three. Hard work. The only guys who think traders don't work hard are the non-traders. Believe me, I have a lot of friends, and I have experienced it myself. A lot of times my friends tell me, you know, after being married for a couple of decades, we do tend to have arguments not necessarily hostile ones, but just plain arguments.

So a lot of my friends tell me and I have experienced it myself, when a husband and a wife fight, when the husband is a trader, the wife says, 'You do nothing except sit in front of a computer all day long with your legs up on an easy chair, and you're just doodling, and pressing a few buttons on your keyboard and making money. You're not working hard. I'm the one who is actually working hard in the kitchen'.

Believe me, nothing is further than the truth. While others are partying you might be working long hours. Remember, the commodity markets in India work for 15 hours from 9 am to midnight. No breaks, no tea break, no lunch break, no evening high tea break, or whatever.

Then you will want to read up some research material. You might want to update yourself with the news. You might wanna check about what the overseas markets have done. So I can tell you from personal experience, it's an 18 hours a day grind. Choose wisely before quitting your job as to whether you can take it.

A lot of times, a lot of people want to quit because the work pressure is just too much. If you think you're sitting back in an easy chair and pressing a few clicks on your keyboard or on your mouse and it's going to rain money on you, think again.

A cool head. Now this is not very easy to get, and especially if you have been trading for a number of years, a cool head is not something that comes very easily, but it's of paramount importance.

There is an old saying in the trading community, you're not actually trading against the market, you're trading against you. The market doesn't know you exist. You're basically trading against your greed, your fear, your biases, your mental demons, and your prejudices. 'Oh this stock is unlucky for me, this stock is very lucky for me, etc'.

So a cool head is what is very much needed, especially, when the trade is bleeding, it's going against you, and you're seeing your mark to market losses rise in front of you on the screen during market hours.

Now, stress, I cannot emphasise enough, is the number one enemy of a trader. Do you know that trading impacts not just the mind, but also the body of a trader? Let me tell you why.

Trading basically is a very high adrenaline game. Adrenaline is basically the chemical in your body that is responsible for fight or flight behaviour in an individual. A timid person will run away from an adverse situation. A very aggressive person will tend to fight back. Now, what makes a person either run away from a situation or grind your heels into the ground and fight back? It's the adrenaline gland which secretes this adrenaline chemical.

Now because trading is so much of a nervous activity, in addition to adrenaline, you're basically going to see your body releasing cortisol. Cortisol is again another chemical, which is a natural process to get released whenever you're stressed out. But do you know the long term impact of excess cortisol release in your body? Let me tell you what happens.

You will get a puffy, a very disproportionately large face. You will basically get an expanding waistline, a puffy and saggy chest. You will get high blood pressure. You will suffer from attacks of insomnia or lack of sleep. You will have mood swings. You might feel depressed at one moment short tempered, angry, and aggressive, the next moment. You might feel frustration. Your skin will get patchy. It will get rough. You might develop dry and cracked skin. There might be some purple patches on your skin. Believe me, this is stress from trading, manifesting itself on your physical body. If you think it's just a mental impact of trading, it's not.

So if you're unable to handle stress by being a cool headed guy, these are side effects of excess cortisol released in the body over a period of years and the list is not over yet. Over a period of time, excess cortisol release also triggers osteoporosis or making the bones porous. In extreme cases, I've seen people who get up from a chair and fracture their thigh bone.

You'll get muscular weaknesses, and you will basically have temper tantrums. I have an admission to make here. Although you will see no puffiness in my cheeks and kind of a bloated look on my stomach or chest, but years and years of trading has made me extremely short tempered, and my language is coloured.

I am working on it, but this is something that you will go through if you're going to be working 18 hours a day, five days a week, and the remaining two days a week, you're sharpening your tools. you're watching the charts, you adjusting your studies, your trendlines, your moving averages, your Fibonacci, your Elliot wave counts, and what not.

So are you able to cope with this kind of stress? Can you still keep a cool head after going through all this? If yes, go ahead and start planning on becoming a trader.

Now the mindset is extremely important for a trader because it is the mindset that will carry you forward during times of distress. And like I said, since you have to be working for long hours, it's not just the mind, but it is also the body both that must be robust, in a trader.

You can't be a feeble bodied person or a person with a weak constitution and become a good, superlative trader. The mind and body must both work in harmony.

Now you must be honest with yourself and ask yourself some questions. That will determine whether you're cut out for trading or not. If you're somebody who is timid natured, who gets scared very easily, or gets upset very quickly, then chances are you will wind up surrendering your trades fairly frequently. Your profits will be small. Your losses will be bigger. Profits will be few and far between, and losses may be relatively more frequent.

On the other hand, if you're inclined to think logically and you're relaxed natured you will see through rough patches easily and get through the teething phase of your career as a full time trader easily and faster.

So what you are basically required to do is work on yourself, mould yourself, discover yourself and, like Rambo said, define yourself. If you are up to it, if you can reinvent, reorient, and reprogram yourself, I think nothing can stop you from succeeding as a full-time trader.

On this optimistic note, I'll say goodbye to you in this video, not before reminding you to click like on this video if you agree with what you saw, if you liked what you saw. Click on the bell icon to receive instant alerts about fresh videos being put up out here. I'd love to hear from you in the comments section. Good, bad or ugly, your feedback is always welcome and help me reach out to fellow like-minded investors and traders by referring my video to your family and friends.

I thank you for your patience and watching my video. Till we meet again in my next, this is Vijay Bhambwani signing off for now. Have a very profitable day. Bye.