How Successful Day Traders Think

Have you ever wondered what separates the successful day traders from those who struggle to produce consistent profits? Most day traders give their sole focus to the trading strategy they use. Could it though, be something else that really makes the difference? The truth is you can teach two day traders the same trading strategy and one may succeed while the other might fail. Obviously then the trading strategy is not the reason for the failure. What then separates those two traders?

Trader psychology or the way one thinks more often than not dictates success or failure rather than strategy alone. Through the rest of this article we will examine the critical way in which psychology can effect a traders actions. Additionally we will break down 4 ways you can make sure it effects your trading in a positive way.


On May 6th 1954 Roger Bannister broke the 4 minute mile. Since the time of the Romans the 4 minute mile was thought to be unbelievable and even potentially dangerous to your health. Some medical ‘experts’ even said running the 4 minute mile would result in death! How then was Roger able to set this amazing record. Its been said that after failing to run a sub 4 minute mile many times, he then began relentlessly visualizing in his mind running a 4 minute mile. On May 6th 1954 Roger had already broke the 4 minute mile many times in his mind which was the key to doing so physically. What truly shows the power of belief is that after Roger proved it was possible 16 others broke 4 minutes by the end of 1957. This story holds a truly critical principal successful day traders already use on a daily basis.

Belief always precedes success is a universal law that will never fail!


It is very difficult to put into words just how important a positive attitude is for trading success. Getting into a positive mental state and then staying their however can be very difficult, cycle1especially after taking a series of losing trades. The picture to the right illustrates the cycle many traders go through mentally when they first start trading. Lets break down each of these four points individually, as well as how they effect each other collectively.

1.) Potential ~ Your potential is dictated by your beliefs which have been formed over the course of your life. Those who were raised in poverty tend to have the belief that they have little potential and thus why the vast majority who were raised poor continue this way throughout their life. A great example of this is the welfare system. Studies have shown that those who grow up on welfare have a much higher probability of becoming a second generation welfare recipient as compared to those who grew up in now welfare supported households.

As it relates to day trading, many traders continually lower the potential they believe they will achieve. Why does this happen? Many times this is the result of trying and never succeeding with every mainstream trading strategy, software, or EA. Years of jumping trading system to system not only produces the relentless cycle of hope and loss, but it also slowly lowers your level of expected potential. This is extremely dangerous to your success!

2.) Action ~ When you believe the potential for your success in trading is low (normally caused and reinforced by years of failing) you then will take little action which is the second point in the cycle. The amount of action that you take is directly related to the potential or certainty of success. If you believe 100% that there is no possible way you can fail this will spur you to take massive action. Unfortunately this also goes the opposite direction as well. When you are not certain of success due to the numerous years of little or no success you will take little action which brings us to our third point…results.

3.) Results ~ Anytime someone has little or no certainty in their future success they then take little or no action which leads to negative or poor results. Are you beginning to see how these points are connected?

4.) Belief ~  Your beliefs are a directly related to the results you achieve. Lets put all four parts of the circle together to see how one point can effect the next. To begin, if you believe you have little potential for success you will take little or no action which will then lead to poor results and those poor results will only reinforce the belief that you cannot learn to trade successfully. To this point we have taken the viewpoint of a negative mindset, but it is even more important to understand the cycle works for the positive as well. When you have complete conviction that you will succeed in the market you will take massive action which in turn leads to positive results. The positive results you achieve will then reinforce your belief that you will succeed, and the cycle continues from their. Lets break down 4 ways to change a negative cycle into one that is positive and promotes success.


1.) Don’t Trade Alone ~ The fastest way to start developing a positive cycle is by seeing positive results right away. How can you see positive results before actually achieving consistent profits of your own? One of the fastest ways to experience positive results is though a community.  Seeing others succeed, and hearing of success, allows you to visualize positive results before you actually achieve them yourself. Many people were able to break the 4 minute mile, but only after Roger Bannister did so first. Being part of a community will essentially give you access to the “Bannister’s” of the market. Knowing success is achievable will allow you to be absolutely certain of your own success, even if it has yet to officially come.

2.) Have A Plan ~ Napoleon Hill said “those who fail to plan, plan to fail.” Having a plan is essential to developing and maintaining a strong positive belief in your success.  Do you know the exact criteria that is required to take a trade? Do you know how to manage a trade once you enter a position? What is your exit criteria? The importance of a detailed trade plan is huge! Without criteria that can be followed each and every day, consistent success will be very difficult if not impossible to achieve over the long haul.  Do you have a detailed trade plan? If the answer is no, and your struggling to be consistently profitable this could very well be playing a part.

A well defined trade plan also plays a large part in overall confidence. When you know how to handle each market condition before it occurs you can be confident in your ability. Sun Tzu said in The Art of War, “Every battle is won before it is ever fought” and the same could be said of every trade. Much like battle, your pre-trade planning can make the difference between a successful trade and a losing one. In addition to your trade entry, knowing you have a clear well defined plan for trade management and trade exit should instill even more confidence. How can you develop a trade plan if you haven’t to this point? That brings us to the next point.

3.) Gain Knowledge ~ Knowledge goes hand in hand with a positive belief! It is difficult to believe you can succeed without the proper knowledge. If you lack the knowledge this MUST be your first goal! Truly understanding how the banks move the market is powerful information that transforms belief from negative to positive quicker than anything else. As traders we all know that markets are driven by the person or group that controls the majority of the volume.

4.) Take Action ~ Making changes involves taking action. I think it goes without saying that you cannot go from failure to success by simply doing nothing. Success never comes easy. With that being said the initial step is always the hardest when it comes to making difficult changes. It is important to remember though, that the cycle mentioned above builds on itself. If you start out taking a clear, guided, and positive step towards your goal success will perpetuate itself and become easier with time. You must however take that first step.


Promise yourself that today will be the day you start taking trading seriously. Take that first step, stop asking questions, and join our live trading room!

Live trades taken in the Live trading room on Monday 4th March 2019:

I continue to post the live day trading videos on my Youtube Channel where you can find more live trades from the last 4 years, all taken live in our Live Trading Room.






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Hope this helps,

Alexander Soares




Also published on Medium.