Beautiful? Or Stressful?
Why is it that when you ask most successful traders about trading they will tell you it is the most beautiful job in the world? Yet when you ask a struggling trader what they think of it and they will tell you it is one of the most stressful jobs in the world.
So, what is one of the main things that separates those who are successful and those who are struggling? A broad answer to this would be their mindset or psychology towards the market. Let us break that down a little bit more.
Most losing traders I speak to and ask about their trading will tell you a lot of times they are hoping, begging, wishing, praying that their trade or position will work out in their favor. Yet you ask a successful trader about their trades and there is no emotional attachment to how they feel about the outcome of their trades.
Successful traders are consistently reminding themselves that market movements are always unknown. No matter how much you are hoping, begging, wishing, even praying a position will work, you simply cannot control the outcome. So how do you look at something unknown and wager your hard-earned money on it without becoming emotional?
It is simply a numbers game, knowing your probabilities based on previous data studied over a course of time. Once you have a strategy that either puts your win to loss ratio in your favor or risk/reward in your favor (ideally you want both) then it is time to build confidence around that strategy. Building confidence around a strategy to where you can execute it on an unemotional basis takes time and patience.
Check out our Forex Signal strategy.
Once the confidence has been shaped around your strategy, then you can work on different methods of position management to increase profitability. By this I don’t mean over leveraging yourself; that is the number one reason a trader will crash and burn! By working on position management I’m talking about using “price windows” to buy and sell (also known as scaling in and out).
After adjusting and trying different methods find one that works consistently and stick with it. Don’t try to make it perfect or try to make something that wins 100% of the time because I haven’t seen one yet, because 100%-win ratios do not exist.
Find something that works consistently and stay with it until you start to see irregularities in its performance, at that point it is time to optimize again and make necessary adjustments. But regardless, stick with your strategies foundation. Often, those who are lazy and do not want to put in the time to find the right corrections will leave looking for something completely new, only to find that if they would have stuck with what they were using they would have found long term success.
Traits of Successful Traders
It doesn’t matter what market you trade, discipline will always be a necessity. Successful traders are characterized by their level of focus, patience, ability to remain disciplined. If you can possess those traits you can grow into a successful trader. View more traits of successful traders.