Trading Psychology
Trading Psychology-Qualities of Successful Traders
Everyone is different, but certain qualities are common among all successful traders.
- Commitment: Focuses on trading exclusively. Anything that distracts from fully concentrating on the markets is set aside until after the trading day ends.
- Introspection: Continually reassesses personal strengths and weaknesses. Strategies are devised to capitalize on the strengths and neutralize the weaknesses. Successful traders are less concerned with how they measure up to others, than how they measure up to the standards they set for themselves.
- Self-Control and Heightened Awareness: Reacts with equanimity, whatever the scenario. Neither losses nor profits excite the successful trader to the point at which he cannot function in a rational manner.
- Realistic: Establishes realistic goals. Never takes irrational chances in order to “improve” the possibility of achieving windfalls. Recognizes that traders have no personal control over the market and that losses are inevitable, no matter a trader’s ability.
- Patient: Understands that instant gratification is rarely achieved. Does not chase markets. Knows that there will always be future opportunities.
- Adaptable: Adjusts to changing circumstances and sudden unexpected events. Recognizes that a trader must operate with a set of rules, but that changes in market conditions may require a change in the rules.
- Responsible: Doesn’t blame others for own shortcomings. Takes risk in exchange for the possibility of an appropriate reward.
- Creative Thinking: Sees beyond the obvious. Draws ideas from a wide variety of inputs and is not afraid to do the unusual or unexpected.
- Self-Confidence: Believes he/she will succeed. Does not allow losses to diminish that belief. Successful traders recognize that past failures cannot be erased and do not dwell on them excessively. They also recognize that every trade is independent of the past and offers a new opportunity to achieve a positive outcome.
