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How to Beat the Market Makers at Their Own Game: Uncovering the Mysteries of Day Trading by Fausto Pugliese

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CHAPTER 15 How to Be a Successful Trader

Why do 80 percent of traders fail in market trading? This chapter summarizes the methods presented in this book for being a successful trader, and it all starts with having a philosophy.

Have a Philosophy for Successful Trading

First of all, every trader must subscribe to a philosophy for successful trading. Below we'll discuss four common philosophies of successful traders.

The first philosophy is that there is no place for emotion in day trading. Set trading rules that are followed and use them as a foundation for all of your trading.

The second philosophy is to always follow the market makers or institutional traders. Market makers make a market in the stock while the institutional traders (pension fund managers, 401K fund managers, and mutual fund managers) control massive amounts of money, which controls supply and demand.

Third, successful day traders keep things very simple (complication equals confusion). Never forget the KISS method (Keep It Super Simple). Keep your trading system strategy simple because simple has advantages, such as:

  • You will make fewer mistakes—always learn from your mistakes or bad trades.
  • There is less expertise required (that does not mean you stop learning about trading).
  • There is less time required.
  • There are fewer indicators required—technical analysis and over-complicating is a recipe for disaster.
  • It's a more reliable trading system.
  • You limit your risk when trading.
  • You'll spend less time in front ...

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