Trading is not just about finding the right strategy to use, practicing it and then making copious amounts of money with it. Traders have to develop certain traits, which in turn enable them to implement a trading strategy effectively, regardless of market conditions. When someone begins their trading journey, it is highly unlikely that they possess all of these traits. This is definitely good to know because it tells you that successful traders are not born; they develop through hard work and this includes developing the following traits:
Discipline is an important trait that every trader needs to have. The market provides you with an infinite number of opportunities to trade. There are thousands of financial instruments that can be traded, but only a few of those can provide great trading opportunities. If a strategy includes five trades a day, targets and stop losses are automatically set for every trade. The actual trading activity doesn’t last for more than five seconds, which means that you just need a second to enter into a trade. But, every other second is a chance to mess the five trades, getting distracted, skipping trades, taking more trades than necessary, holding trades for too long or prematurely exiting trades.
Being a disciplined trader means that you need to sit on your hands, and wait for trading signals in order to make a move. When such a signal does occur, you should move immediately and follow your trading plan. Brokers like 101Investing offer plenty of sophisticated trading signals that can come in handy. It takes discipline to do nothing when there is no trading opportunity. They just need to stay alert and when it does occur, they should have the discipline to act instantaneously.
This trait is very much related to discipline. A lot of waiting is required when you are trading and jumping in and out of trades is a rampant problem amongst traders. These are the ones who haven’t developed their patience enough to wait for opportune entry and exit times. You need to be patient and wait for your ideal entry and exit points, as outlined in your trading strategy.
There will never be two exact trading days. There will constantly be differences and this can create a problem when people want to implement the same strategy every day. However, you have to remember that sometimes, there is more volatility, less volatility, a weaker or stronger trend or a range. Successful traders are those who can implement their trading strategy in all market conditions because they are able to make changes to it when needed. This means that their trading strategies have to be flexible and adaptable, based on the conditions of the day.
- Mental toughness
This is somewhat similar to being thick-skinned. You will have to put up with losing trades and be able to bounce back. If you feel discouraged upon losing a trade or the strategy fails to give the results you expect, then you will be miserable. You need to accept that losing trades do happen; even the most successful traders have losing trades. The key is to stay calm and rational during these losing streaks and not let them affect your judgement. You need mental toughness to stay focused on your trading plan despite suffering losses and moving on to find good opportunities.
Initially, every trader needs some help with trading because they are just getting started. Therefore, some brokers, such as 101Investing, provide their clients with access to educational resources, such as e-books, trading videos and tutorials and even account managers. But, ultimately, your trading success will depend on you because you are making your trades. Thus, you need to develop a sense of independence and not rely on anyone else.
Once you have developed a trading method that gives you results, you don’t need anyone else’s input. This doesn’t mean that you cannot get help; sure, there will be times when you will require assistance and you can reach out to experts to ask for it. Independence is all about developing a trading style that works for you and building your trading toolbox so you can fix your own trading decisions instead of relying on others.