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This is the second part of my commentaries. You may want to read the first part in order to understand this part better. So here we go:

• Develop a trading philosophy. According to Schwager and his sources, trading is not just about buy low and sell high (or buy high sell even higher for that matter). I personally don’t understand the difference between a trading philosophy and a trading style. Does our stock-picking style (based on what indicators etc etc) is a part of trading philosophy?
• What is your edge? In his book, the author states that if you cannot answer this question clearly and decisively, you are not ready to trade. But for me, this is BS. Even if you don’t have a specific edge, you can still do well on trading. Just guess, how many people are using the swing trading technique? Billions! (okay, I exaggergate there) but still, they can churn up some sweet dollars in their trading activities. So if you do have an edge, lucky you! But if you don’t, don’t be disheartened because you may still be able to win in the financial market.
• The Confidence. Being confidence in your buy/sell decision is very important and fundamentally dictate your trading outcome. I don’t know which comes first, the successful trading or the confidence but drawing from my personal experience, if you’re not confident enough on your stock-picking, then don’t do trading for the day. It might bite you in the ass later. My trading statements indicates that on the day that I’m not confidence on entering the market, I loose. Just go out somewhere and refresh your mind. Only hold a position if you are truly confident in it.
• Hard work. I’m a lazy boy. That’s probably why I don’t qualify as a successful trader :P. But seriously, to become a successful trader you need a habit on doing things excessively. Just calculate the time to actually learn the fundamental analysis, technical analysis, mastering the macro-economy, memorizing the patterns as it appears on the charts, catching up with the news that might affect your position, those take a lot of time. And if you’re not a hard working person, slim chances that you will succeed. Unless you are me that is… LOL :D.
• The market wizard tend to be innovators, not followers. This corresponds closely with developing your own trading philosophy. But still, I don’t agree that in order to be a successful trader you must be an innovators. Of course if you can, good for you. If you can’t, there’s still room for everybody as long as you have a hard working habit ;)
• Obsessiveness. This is another important habit for a successful trader. They breath and lived with the market and knows instinctly what is currently going on on the street. Of course as I said on another piece of this series, it takes time to develop such obsessiveness. Starting a blog about financial market is one form of obsessiveness ;)
• To be a winner, you have to be willing to take a loss. Not the kind of sentence I would use. It’s very abundant (er… did I spell it correctly?). Why don’t we just rephrase it to It takes some money to learn. The best teacher in the financial market is loss. How do you prevent loss? I’ll explain it briefly below.
• Risk control. Okay, I lied. As I dig deeper to this subject, I can write a whole new post with the material (which I will tomorrow). So stay tuned ;-)
• You can’t be afraid of risk. risk control should not be confused with fear of risk. No trader will be a successful one if he’s afraid of risk. Risk its self is actually the market’s way to show us what have we done wrong, and with the right money management (will be explained on my risk control article) we can minimize our risk and still learning alot from the market. Do not afraid of the risk! Just pretend it to be your killer professor and you’ll do just fine (read: you’ll do all the assignments needed to gain his/her favor won’t you?)

To be continued to the third part.