Stocks & Commodities V.

26:10 (36-39): Top 10 Trading Habits by Jody Samuels

TRADING FOREX

Avoid That Traders Trap

Top 10 Trading Habits

Here are 10 habits you can incorporate into
your trading. They are simple and they work.
by Jody Samuels
eres a story about two currency traders Ill just call
them Frustrated Farah and Successful Stacey. Farah, whos a
technical junkie, has fallen into the typical
traders trap. She is out of trading shape, with
no business plan, no profits, and has very
little discipline. She trades emotionally and
hasnt developed a trading plan, either. In
short, Farah lacks a model for her trading
business. Theres a good reason why shes
frustrated.
FIGURE 1: THE TRANSFORMATION PROCESS. Whip yourself into shape by learning entrepreneurial
Stacey, on the other hand, used to be a skills and habits.
technical junkie, but has transformed herself
into a successful entrepreneurial trader. She makes money THE TOP 10 TRADING HABITS
consistently, trades with discipline and unemotionally, and
1 Establish a trading business for the right reasons.
operates with a clear trading plan. In short, Stacey is in
Make a list of your reasons for entering the trading
trading shape and has the foreign exchange traders edge.
business. If your main reason is to make a quick
Theres a good reason why shes succeeded.
buck, you may as well go to the local casino, buy a
How do you avoid falling into the trader trap? Let me tell
lottery ticket, or look into the get-rich-quick schemes
you a little about my own trading history. I was a successful
you find on the Internet. Many people are attracted
investment bank trader for 15 years. When I left the instituto trading because it appears to promise more money
tional business and started out on my own, I realized there
for less work, resulting in an independent lifestyle.
were many traders who wanted success but couldnt attain it.
And it can, but not without dedication and hard
Why? Those traders had the technical knowledge, they had
work. It also helps if you have a passion and a love
learned about Fibonacci, support and resistance areas, chart
for trading and strongly believe that your heart and
patterns, moving averages, and other technical indicators. In
mind are in the right place to do it.
fact, they had learned all of the technical aspects of trading
that should have helped them succeed, but they were still
2 Complete a traders business plan. For many people,
looking for the traders holy grail.
trading is a hobby, while for some, its a business.
Technical knowledge of trading systems alone, I realized,
Where do you fit in? If you want to make trading a
does not a successful trader make. Learning entrepreneurial
hobby, then treat it as a hobby. But if you want to
skills and lifelong habits does. When I looked closely at the
make some serious money, you have to treat it like
top traders, I saw that they were all entrepreneurs, and they all
a business even if its a part-time business. As
had developed good habits. They treated trading like a
most people know, there are many aspects to buildbusiness, and that made the difference between them and the
ing a business. All entrepreneurs can attest to that.
rest of the traders.
Imagine building a traders business plan, which
With my skills as a forex trader, together with what Id
will be your blueprint for success. Take that step
discovered about other successful traders, I developed a
toward making trading your part-time or full-time
system that embraces an entrepreneurial style to become
business.
successful. My system is based on cultivating 10 habits that,
if followed, save traders time and effort, help them make
3 Define your goals. How much fun would it be to go
more money, and encourage them to achieve their full potento a hockey game where there was no goalie? How
tial as forex traders.
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FX TRADERS EDGE

Stocks & Commodities V. 26:10 (36-39): Top 10 Trading Habits by Jody Samuels
TRADING FOREX

interesting would it be to go to a baseball game

without a home plate, or a basketball game without
a net? How far can a game go without goals? What
would be the point? Even businesses have goals;
you wouldnt get far without them. You need to
thoroughly think through your specific goals for
your trading business. In defining your goals, answer the following questions:
Do you plan to trade part time or full time?
What time of day will you set aside for trading on
a consistent basis?
What specific goals do you have about daily,
weekly, and monthly profits and returns?
Do you have certain metrics that you are tracking
on a weekly and monthly basis?
How do you define a successful trader?
4 Commit to your education with a trading coach.
How do successful performers structure their learning in any field of endeavor? They have a coach and
they build their skills by studying, learning, and
practicing. Most expert performers engage mentors
at various points in their careers to help them learn
and grow. If you think you can train on your own,
youll need to define structures to keep you accountable and on track. To keep yourself on track to
achieve your goals, think about getting a coach.
Often, its too easy to get locked into your own head
and your own ideas.
5 Understand and exploit your unique trading personality. There are many different trading styles
because everyone is unique. Different personalities
are better suited to trade with certain styles. If you
enjoy sitting in front of the screen watching the
market action all day long, you may prefer momentum trading or daytrading. However, if you like to
analyze the markets, establish your trade plan, and
let your trade play itself out, you might be better
suited to swing or position trades. Neither style is
right or wrong. What is key is finding the style that
suits your temperament and personality.
6 Follow a system. If you look at successful organizations such as Microsoft, Federal Express, and WalMart, youll find these companies are doing the
same thing, the same way, every day consistently. They all arrived at a winning formula that
they execute on a daily basis. As a trader, ask
yourself if you have the winning formula to get that
traders edge. If you do, are you executing that
formula or system consistently, or are you still in the
technical traders trap, always looking for other
systems to use? If you have a system, follow it.

7 Plan the trade and trade the plan. The path to

greatness lies not only in our performance, but also
in the systematic practice we put into the performance. Trading mastery is a function of internalizing market patterns, rehearsing execution skills for
trade entries and exits, and learning from constant
market feedback. Without a trading plan, our emotions get in the way and we run the gamut of fear and
greed. Planning the trade and trading the plan is the
practice you need to develop.
8 Measure your performance. Elite performers such
as chess masters and concert pianists study and
practice daily in order to constantly improve. They
keep notes so that no aspect of performance is
overlooked. Look at the performance metrics that
professional traders monitor to figure out their
strengths and weaknesses. Keeping score builds the
motivation to continuously improve. It also tells
you which areas need improvement. Track every
trade you make and take stock every week or month,
just like you would take inventory in a business.
9 Learn the secrets of successful traders. If you study
the successful traders, you will see that they have
ambition, determination, patience, and a positive
attitude. They usually hang in there, more determined than ever, when others throw in the towel.
They take notes and learn from their mistakes,
applying these lessons to succeed the next time
around. Successful traders thrive on independence.
They are take-charge people who can come up with
creative and intelligent solutions. Trading needs a
lot of stamina, and successful traders have that in
spades. And they never doubt they are worthy of
success.
10 Add balance to your life. If you adopt a holistic
approach to trading and realize that it shouldnt be
your whole world, youll better achieve the work
life balance that we all strive for. Youll need to ask
yourself how trading fits into your life, how you are
planning to simplify your life, what the rewards will
be if your trading is on target, and what kind of a life
you have outside of trading.
It takes 21 days to establish a habit. I know these habits
work not only from applying them to my own trading but also
from those traders I have coached. One example is a client
who traded for three years and wasnt able to put together
three months of consistency in his trading results. After
applying these 10 positive habits, he has made between 5%
and 25% return on his trading capital every month for the last
12 months, bar two. Another client tells me this program has
affected his family life in many positive ways. He has

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Stocks & Commodities V. 26:10 (36-39): Top 10 Trading Habits by Jody Samuels

incorporated weekly goal-setting sessions with his family,

and this has led to consistency in trading. Im confident that
if you apply these habits, you will begin to save time and
effort, make more money, and be well on your way to
achieving your full potential as a forex trader.
Jody Samuels (www.fxtradersedge.com) is a leading coach
for successful traders and the creator of the FX Traders
EDGE program. Samuels trading expertise spans the finan-

cial, currency, and commodity markets as a trading professional for a US global investment bank and sales professional
for an energy company.

SUGGESTED READING
Samuels, Jody [2008]. Determining The End Of The Trend,
Technical Analysis of STOCKS & COMMODITIES, Volume
26: Bonus Issue.

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