Having a tested technical analysis approach to the market, with clear rules for entry and exit, that gets the odds on your side over a larger number of trades, is important to be successful. But there is more to trading. Understanding how macroeconomics influence markets and the price of assets is beneficial to giving traders an edge. Having the right state of mind to execute trades consistently, without being hindered by emotions or unrealistic expectations is important. A solid trading psychology is needed to make the right decision in every situation.
There is a set of tools needed in order to trade effectively. Not having the right tools could mean failure. Risk management implies identifying trading risks and knowing how to handle them, to prevent deep drawdowns or losing your trading capital. Rules on trade risk and risk / reward can help to maximize profits while minimizing losses. Having a trading plan with checklists, rules and fixed routines supports a trader, because the plan makes it clear what to do in each situation.
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