5 Habits That Will Make You a Better Trader
Dear Penny Stock Millionaire,
If you want to be a smarter, self-sufficient trader, you have to work every single day to improve your trading.
There are no shortcuts — but there are a ton of resources.
No matter who you choose to learn from, always vet your resources. I see so many fakes and newbies on social media trying to be ‘gurus’. They lure in new traders with false promises of big profits.
And too many newbies oversimplify. They think “made money — good trade. Lost money — bad trade.”
I disagree. For me, it’s about so much more than how much money you can make on a trade. It’s about how well you know the game.
How well are you adapting to the market? Are you sticking to your trading plan and process? Are you giving into FOMO or greed when you’re in a trade?
Look at the bigger picture. Don’t just focus on the profits. Here are five things you can start doing today to improve your trading.
#1: Focus on the Process
Every trader’s process should start with studying.
I teach my students to be self-sufficient. I don’t want anyone following someone else’s trades, including mine. I teach the trading process, not how to get rich quick.
Don’t fall for fake newbies who promise huge profits but don’t share the details of every trade. Anyone can get lucky and profit from a random, risky trade. But you gotta keep your risk in perspective.
Don’t take yourself out of the game by risking more than you can afford to lose or jumping into bad trades.
Focus on learning the process, not on the money and potential profits. Take the time to study and learn the patterns and the market. Find patterns that make sense to you and watch how they perform in the market.
When you’re ready to start trading, it’s key to…
#2: Trade Small
I trade with a small account to show my students the process. Again, trading isn’t just about the profits. Especially in the beginning. Build your knowledge account first.
You need to learn how to make a plan for every trade. Know exactly what your risk is and where you’ll cut losses.
You should also have a goal for the trade — that’s where you’ll take profits if everything goes well. But don’t base that goal on how much money you want to make. Look at the resistance level or risk/reward from your entry to set your profit target. My goal is usually 10%.
Always stick to your plan. If you’re wrong, get out. Rule #1 is to cut losses quickly. Never hold and hope thinking the stock will bounce back.
If you’re only focused on money and profits, it can be hard to control your emotions in a trade. You might be shaking and sweating… maybe your stomach’s in knots… That’s because you’re scared to lose money.
Trading with a small position can help you get more comfortable being in a trade.
Learn and refine your strategy over time by meticulously executing trades with a small position. Your goal should be consistency, not big profits.
#3: Analyze Your Trades
If you analyze your trades, it’s easier to see what’s working in your trading and what’s not. You don’t have to wait for a big loss to show you what you’re doing wrong. You can see when you’re making mistakes.
Trades can move fast and your emotions can skew your mindset. That’s why it’s so important to track every aspect of the trade and then go back and review it all with a clear head.
Record what you did right and what you did wrong. What was your mindset — did it affect your execution?
You may find you’re overtrading, chasing stocks, or taking random trades. That’s a sign it’s time to take a break and go back to studying. Review the basics and work on your discipline.
Don’t think you’ll ever perfect it. I’ve been trading for over 20 years and I still slip up here and there. It’s OK. You’re human. Take a step back and find your focus.
If you review your trades regularly and refine your strategy, you can get better over time. But remember, it’s a marathon, not a sprint. It won’t happen overnight…
#4: Adapt to the Market
If you plan to trade long term, you’ll eventually have to adapt to the market. It’s always changing. Hot sectors come and go, patterns change, and the market evolves.
You might find a pattern you love and that fits your strategy. Then one day you realize it’s not working like it used to…
Here’s the thing, the market is always right. Don’t waste your time and money trying to force trades and prove you’re right. If you want to stay in the game, you have to adapt.
#5: Remember Your Goals
Some of my students come to me because they’re sick of working for someone else. They’re tired of the daily grind. They want more freedom to travel or spend time with their families…
Trading can offer the freedom to work from nearly anywhere. But if you think it’s gonna be quick, easy money — you’re wrong.
Trading is one of the hardest things you can do. It takes hard work and dedication. You’ll make mistakes. That’s OK. What’s key is that you learn from them.
Sometimes you’ll feel like giving up. Especially if you have a big loss or you’re in a trading slump. Focus on your goals, Remember why you want to trade. How can it change your life? What can it mean for you and your family?
The Bottom Line
You have to go back and analyze every single trade. You can’t base a trade’s success or failure on profit or loss.
There’s so much more to it than that. Be smarter than that. Remember that the market always changes and evolves. What works now may not work in a few months or a year. So pay attention.
Practice, learn, be prepared, and execute your plans for every single trade. It matters.
Editor, Penny Stock Millionaires