How to be a successful trader | Top 20 Rules For Successful Trading

Stock Trading

If you are a beginner in the stock market and wish to be a successful trader in the coming few years then you are at the right place. I am going to discuss a few steps here that will definitely help you to know how to be a successful trader from the struggling one. You have a dream to become a profitable trader and you have started as a beginner and still struggling in the stock market then follow these steps. This is based on several readings and interviews of different successful traders in Indian as well as in foreign stock market and also in the forex market. 

How to be Successful Trader 

Follow these basic steps to be a successful trader if you have already entered into this field;

01. Know the difference between Trader and Investor

First of all you must be clear whether you are a trader or an investor. If you are a trader then your goals are for the short term and if you are an investor then your goal must be in the long run. 

Traders just buy or sell the stock of the derivatives or currency pairs in the short run. It may be intraday or short term trading but investors invest their capital for the long run expecting good return on their capital in the long run.

Decide who you are?

First of all you must be clear in your mind whether you have the trading psychology when you are entering into the intraday, short term trade or you have the investing goals for the long run.

02. Get the basic knowledge first

Before jumping into the trading particularly in intraday trading you must have some basic knowledge of stock market. You can read basic books or you can take training from any reliable successful trader. Basic understanding is required to understand the market’s behavior, types of orders, some basic Dos and don’ts etc.

03.  Trade to Learn First

Once you have learnt the basics of how to trade, now this is a time to trade for practical learning. For this start with small capitals and learn to trade by trading practically. You will see many ups and downs and also you will be able to test your strategies and different parameters on which basis he will be trading in future.

04. Start with Small

Don’t put all your capital first and start taking huge risks on your entire capital. If you really want to preserve your capital you must start with a small.

05. Don’t be in hurry to Make Profit influenced by Social Media

You can see many social media posts of high profits that can attract you to take high rest on your capital to make a high profit in a hurry. But it needs to be understood that those making huge profits are experts in their fields so learn first and try to take small profits initially then go for the big one.

06. Don’t run behind profit only but follow the process

Just beginning, don’t be greedy for profits and money making ideas only but learn the process and enjoy it to become an efficient trader.

07. Research on trading setup or strategy and test it to be yours

Now you need to research different setup strategies and select any of them. Once you have picked up a set up you need to back test and forward test on this for almost 5-6 months to build your confidence over your shut up. If you analyze your setup with paper trading or with small capital multiple Times this will make you confident and you will be able to take your trade without any psychological hazitance. If your setup which you have selected is not working then you can go for the second one from your selection list and test the same. Once you are comfortable and profitable with the setup, start trading with incremental capital size.

08. Start with few  liquid stable stocks only

Now this is the matter of stock selection. You can start with some cool, stable but liquid stocks first and then can go for volatile one like derivatives and index options. Don’t run here and there and do random trading with random stocks. This will spoil your trading psychology and your tested strategy because you will not be able to implement this perfectly. So be limited in the number of stocks and style in the beginning and explore, penetrate with the more and more experience in the live market practically.

09. Learn about training psychology

Now this is the time to move on step ahead with learning trading psychology. Trading psychology is a must for every trader and in this trading psychology you should know about stop loss and take profit successfully. Most of the beginners just stuck themselves in loss making traits and are not able to exit by taking stop loss and lose their capital in no time. If you are wrong in your few trades exit with stop loss without any hesitation. By doing this we will be able to save your capital and this will be providing you with the next opportunity very soon but if you don’t make an exit and are stuck in one lost making trade this will cause you to lose your capital as well as spoil your trading habit and psychology.

10. Stop Loss is a must

Yes!!! I repeat this point,  ‘stop loss’ is a must for every trader whether you are a beginner or a professional. This will be with you at all times till you are in the market. And make a note that if you don’t follow this you will be thrown out of the market very soon, mind it!!!

11. Follow the market trends

Always follow the market trends and don’t fight with the market if you are wrong in your trade. Market is police try to be long and if it is there then always prefer to grab the opportunity of selling. Don’t try to fight with the market I mention again if you are wrong in your analysis make a quick exit with your predefined stop loss.

12. Be patient and wait for the right opportunity

Mark Minarvini says in his book ‘trade like a market wizard’ that you must not alway trade just because you have to treat but you must wait for the right opportunity patiently this is also a good behavior of a successful trader.

13. Avoid over trading

Many times we are not able to digest the small losses and plan for the big one by over-trading. If you don’t limit your trades then two possibilities will definitely stop your way. First one is if you have made a sufficient amount of profit in the first trade and you become a victim of over-trading then you will lose your profit or the second option can be more dangerous. The second option is if you have lost some amount in your first two trades and if you trade more and more to recover your losses on the very same day then you will convert your small losses into large one. This is also called Revenge trading when you hit a stop loss one by one and take the next trade immediately to recover the loss. To avoid this situation, always avoid over-trading.

I repeat again strictly avoid over trading. This will not give you any profit but definitely safeguard you from taking wrong treat.

14. Always maintain discipline in the market

Well you are in the live market you may be lost in your trading process and in the different psychology so important to maintain the discipline during this time. Always follow the stop loss and risk management rules to avoid any unpleasant happening with your trading journey.

15. Learn and make best from the ‘Technology’

Learn the basic techniques and the technology to be used in your trading journey. You must know how to read data on NSE or chart reading. Most also know how to mark charts on the chatting platform and trace your trading behavior during your trading journey. Today we are living in the 21st century and we all are surrounded by multiple data sources. You must be wise enough to choose the one which is for you and you must make best from that resource. Use of technology is an inevitable part of your trading process so habitual use of technology. 

16. Take your trading as full time business not like a hobby

Yes!!! You must take your trading process just like a full time business or you can say, don’t take it as a hobby otherwise you are not going to do good or make super performance in your reading journey. If you take your trading as a full time business you must have a proper plan to implement rather than jumping on any random trade and taking losses as inexperienced traders do.

17. Try to Study the Market and the Economic Scenario

Always study the market and its components. You must keep your eyes open about what is going around the world in terms of economic or political happenings. Also try to get some knowledge about the ongoing situations in the companies where you make most of your trades. This will give you an extra age over your trading decisions. For example what will be effect of change in monetary policy on Stock Market.

18. Take risk as per your appetite

Only take the risk that you can digest easily without overloading your trading psychology. If you don’t follow this you will be thrown out of the market very soon. To avoid this situation always fix a stop loss and this top loss must be as per your risk appetite.

19. Be bold in your decisions

Don’t fall in love with any particular stock and don’t show loyalty to those stocks in your portfolio if they are not moving as per your analysis. In this situation you must be bold in your decisions to get rid of the bad trades if you are wrong in your decisions. If you are wrong in your analysis, accept it, exit it and search for the next good trade.

20. Make a record of your trades or journal your trade

Always make a journal of your treat and make a note of each of your actions including your psychological absent downs before, during and post exit of the trade. This will help you in introspecting your trading behavior and to analyze your trading process whether it is as per your plan for its based on random trading behavior.


This is a brief note on ‘how to be a successful’ trader. Before becoming a successful trader you must start with a good disciplined approach to reach at the professional level.

Reference: This note is based on ‘Trade like stock market wizard’ by Mark Minervini, ‘The Market wizards’ by Jack Schwager, Mr Shubhashish’s YouTube video on the power of stock.

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2 thoughts on “How to be a successful trader | Top 20 Rules For Successful Trading”

  1. Pingback: 10 day trading strategies for beginners | How to become a successful day trader - Mudra Money

  2. This is the perfect blog for anybody who wants to find out about this topic. You know a whole lot its almost hard to argue with you (not that I actually would want toÖHaHa). You certainly put a fresh spin on a topic thats been written about for a long time. Excellent stuff, just wonderful!

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