Continued from yesterday.

There are eight things that I have observed about successful traders.  Yesterday, I revealed the first four:

1. They stay neutral.
2. They have a business plan.
3. They keep a journal.
4. They focus on 1 to 3 techniques that suit them well.

Today, I reveal the last four:

5. They are great money managers.
6. They are comfortable with risk and uncertainty.
7. They accept personal responsibility for all of their trading action.
8. They use risk capital to trade.

5. Be a Great Money Manager
Great traders are also great risk managers. They respect the risks they are taking and on each trade they risk a small amount of capital. Usually this is 1/4% to 1% per position (and no more than 2%). The idea is that you can't trade tomorrow if you blow out today and if you can't trade you won't be a great trader, now will you? Great traders protect their accounts. It's their baby. Each position is so small they don't care what happens with it. So, if they have a 200K account and are risking 1/4% on each trade, that means if they take a stop they are out $500. That's a very small amount of money compared to the account. It doesn't matter too much if they take a stop. One or even a series of stops won't be the end of their career. Now, not all traders have this large of an account, but the basic principal is the same no matter what size of account you have. Mathematically speaking, 2% is the most you can risk and still be able to survive the strings of stops that can and often will occur on occasion. So, if you have a 25K account and you risk 2%, you can also risk $500 a trade. Once your account is larger, however, it is advisable to risk less and with experience, you can also learn which types of situations can allow for greater risk compared to others.

6. Be Comfortable with Risk and Uncertainty
The sixth trait of great traders is that they are comfortable with risk. Let's face it, trading is certainly risky and if you are afraid of the risk you won't last. If you are afraid you will lose money, then I can almost say with certainty that you will. They are comfortable trading a pattern that is not a 100% sure thing, because none of them are. They go into an individual trade not knowing what the end result will be. Many new traders have a terrible time with this: the uncertainty of a trade, but you must over come it. It is easy to allow yourself to be frozen with fear over the risks and uncertainties of trading. Great traders get beyond it.

7. Accept Personal Responsibility
Great traders accept personal responsibility for everything they do, even to an extreme. If I loan you $100 and you never pay me back, yes you're a jerk, but I'm also an idiot because there is something I should've been able to pick up on , and if I didn't know you well enough, I shouldn't have loaned you money. I loaned the money. I made a choice and now I am paying for it, so it's on me. The same deal goes in a trade. I don't care who may have told you ABC or whatever was a great buy, whether you heard it in a chatroom, message board, the Wall Street Journal, CNBC or just from your local mailman. No one holds a gun to your head while you are trading, telling you what you have to take or not take. You're the one pulling the trigger. Great traders know that the responsibility for all trades they take, good or bad, is on them.

8. Use Risk Capital to Trade
Finally, great traders use risk capital. This should be obvious. They trade with money they can lose. So, if I had a 150K trading account and tomorrow I do something where I completely mess up and I loose it all, of course I won't be happy, but I won't be on food stamps either. It's not all the money I have in the world. This frees your mind up. It lets you trade and not worry. You just focus on trading correctly. They say scared money never wins, well, I have yet to see a person who had no other job or source of income, thus needing to live off their 5K trading account, make it. So trade with risk capital, not student loan money, not the rent, not the dinner money... You get the picture. It makes life easier.

My hope today is that by reading through some of these characteristics, you can help keep yourself on track for success. It is said that the majority of successful people in the world became such by following in the footsteps of others, whether it was their parents, their teachers or their mentors. Even if you do not have one specific person in mind, familiarizing oneself with the traits of those how have succeeded before you is a rewarding experience.

I hope that you all have a wonderful holiday weekend and I'll be back from vacation on Monday with my typical daily commentary!

P.S. I'd love to receive feedback from you. Please leave a comment or discuss the article by clicking on "Make a comment on this article" below.

Toni Hansen is President and Co-founder of the Bastiat Group, Inc., and runs the popular Trading From Main Street. She can be reached at Toni@tradingfrommainstreet.com.