How to Become a Successful Trader in Stock Market ?

Why is it that some people are successful in trading the markets? And why is it some people fail? Is it luck that determines if you are successful or not in making money from the stock market? Is it the system or strategy that a person use which determines their success?

System or Strategy :

A lot would say that it is the system or strategy that they employ which ultimately determines if they come out winning from the market.

Every system that exists on the internet will show you how to make money using it. Without a doubt, it will make money for you. The question is usually how much money will the setup make for you. All the systems out there will show you how their algorithm has work base on historical data or activity, and then at the bottom of the page, there would be a disclaimer clause that states. Historical data does not determine or guarantee future earnings.

Human Emotions :

So why is it that these sites or pages include this disclaimer clause?

The disclaimer clause is incorporated in it because they know that there are certain elements that they can not control. Human emotions.

Human emotions are always the key to either success or failure in any business. And it is no difference when trading the markets. Read all the books about trading that you want, buy all the successful systems that you want. If you cant control your emotions, you cant succeed in the stock markets.

That's the reason for the disclaimers clause because the one thing that the author can not control is their subscriber's or customer's emotions.

GREED and FEAR :

 There are only two emotions in the stock market that every trader will experience; GREED and FEAR. When this emotion pop up, it is not how we eliminate it but rather how we act on it. They are natural emotions that we can not stop. This emotion forces us to act, thus how we act on it will determine the outcome.

Like anger, when we are angry, it's either we say something nasty or we can kick a bucket or we can dive into a pool of water. Every action that we take produces a different outcome or result.

All too often when we begin to see two to three consecutive losses on our trading activities, we will start to have doubts. When this happens we are already in a state of fear, we fear losing more of our money and thus begin to doubt that the system is working or not.

While no system is absolute, it means no setup will guarantee that you will make money ALL the time. The system seller would say that we would make money consistently, provided we follow their system to the dot.

On the other hand, when we begin to see two or three consecutive gains, we perceive to feel on top of the world. We sense that we can start making good money from the market and then start tweaking the system or maybe putting more money in the market to leverage our earnings and begin to take on more positions, which ultimately make us deviate from the setup we were using. That's when greed has already stepped in to rule our thoughts.

Discipline :

There is a saying The system is only as good as the person using it. So if we don't follow the system when we are making losses or creating profits. We would ultimately fail. And to follow the system requires discipline. The discipline to act on our fear and greed when it sets in will determine how well we do in the stock market.

Once again discipline is the key. We must have the discipline to say I have reached my target. I should take profits now even though it may go higher when greed sets in. And when fear sets in one should say I have to take a position even though the market does not seem to be moving in my favor

While these are but two circumstances when greed and fears arise, there are and will be many instances when we need to decide to either enter or exit the stock market. And these are very two most important decisions to take to succeed in the stock markets. The discipline to follow the system diligently no matter what happens to the stock market.

So no matter how good the system is, the only and sure way is to lasting success in the stock market depends on the discipline to overcome our emotions to follow a particular system religiously.