FTG Blog - Millionaire traders; what you can learn from them

Millionaire traders; what you can learn from them

Learning from millionaire traders is a no-brainer, if you want to do something to the best of your ability, learn from people who do well at what you want to do. If you’re a trader, or aspire to be one, then study the lessons offered by people who have been or are successful in the markets. Trading can be difficult, as almost everyone who’s ever tried it can relate to this. Winning one or two trades is relatively easy, but consistently winning many trades is a much harder task. A certain strategic and methodical approach is required if you want to make money in the markets.

Below are a few quick pieces of advice taken from very successful traders, who have since become millionaires. Bear in mind these are merely tips and cannot be construed as trading strategies; you need to take the information and try and turn it into your own trading plan in a way that works for you and your particular trading style.

I did exactly the wrong thing. The cotton showed me a loss and I kept it. The wheat showed me a profit and I sold it out. Of all the speculative blunders there are few greater than trying to average a losing game. Always sell what shows you a loss and keep what shows you a profit.

– Jesse Livermore

Of course this is a common problem amongst traders. Hanging onto losses in the hope that they’ll rebound, often resulting in no profits. In a worst case scenario they lose out on a lot of money. On the other side, retrieving profits too quickly, and not allowing the trades that are actually working play out. If you want to succeed in the financial markets then small winners and big losses won’t help you on your quest to millionaire-hood.

To be a good trader, you need to trade with your eyes open, recognize real trends and turns, and not waste time or energy on regrets and wishful thinking.

– Alexander Elder

Most first time traders are lazy and rely on outdated methods and don’t put in the extra hours to fully understand how the markets unfold on a minute to minute basis. Knowing what to do in certain market conditions could mean a huge difference on how one might trade a particular asset.

Risk comes from not knowing what you’re doing.

– Warren Buffett

You’d think that blackjack would be risky for a casino; on any single hand the casino could lose money, but over many hands they’ll come out on top. So, over the long term there is very little risk of the casino losing money. People consider the financial markets as one big gamble, but it’s only risky if you don’t have that edge. This edge is attained through hard work and a solid trading philosophy by implementing consistent strategies.

The game taught me the game. And it didn’t spare the rod while teaching.

– Jesse Livermore

So, a theme is evolving here and that’s that trading does involve a certain amount of work, and a methodical, organised approach. But beware. The markets will be is slightly different from one day to the next, for example changes in trend, volatility and volume all affect how profitable you will be from one day to the next and traders always need to adapt to these changing conditions.

As you’ve learnt above you need to let go of emotion and trade what the market provides, not what you want it to provide. The market is neither inherently cruel nor generous, yet it will seem unrelentingly harsh if you aren’t adequately prepared. It can decimate your account in seconds if you fail to use proper risk management, and the only person to blame for it is yourself. The market doesn’t care if you make or lose money. If you are losing money consistently, the market is trying to teach you a lesson. Learn from it, or continue to get beaten till you learn your lessons or lose your capital.

Millionaire traders are masters of their particular craft

Winning traders pay attention to what is happening in the market now, and don’t have fanciful notions about what will happen, or regret about what has happened in the past. This allows them to stay in the moment, controlling risk on losers and capitalizing on trades that progress as expected. Millionaire traders are masters of their particular craft. If you listen carefully, and learn to adapt, the market also has no problem rewarding you for your diligence. It’s an even playing field and anyone can make money. The question you have to ask is, will it be you? Will you become the next millionaire trader?