Why do some traders achieve success while others flail? Well, successful traders exhibit a number of traits proven absolutely essential to excel in trading. While it’s true that the right trade can be life-changing, almost any experienced trader will tell you lucrative trades don’t come from luck but rather skill and strategy. That being said, here are five personality traits known to optimize trading performance.
There’s a popular mantra in trading that goes, “Plan the trade, and trade the plan.” The market is full of temptation, and only the most disciplined traders are equipped to avoid falling under its spell. Traders can be tricked by their intuition, often resulting in simple — but costly — mistakes. Disciplined traders stick to their plan, improving their shot at success by doing so. To be clear, discipline doesn’t mean you should use just one trading technique over and over again. It means knowing when, how, and where to employ the strategy you want to use, making sure to follow it accordingly.
Traders have to know how to wait for the right signal to enter the market. Those who grow impatient end up recklessly jumping into bad trades, leading to serious losses. If the opportunity to trade doesn’t present itself, it’s probably better to switch to another task, like brushing up on techniques or writing a trading journal entry.
The harsh truth about trading is that not every trade is going to go your way. What makes or breaks a trader is how they react to losses. Traders who learn from their mistakes are able to make better decisions down the road, while those who give up miss the chance to catch a great trade.
Have multiple strategies in your trading arsenal. Just because a certain strategy worked one day doesn’t mean it’s guaranteed to work again the next day. Given that trading heavily depends on market conditions, being able to adapt to market changes is a helpful, if not crucial, skill. Don’t be afraid to try something different, as long as you have tested it beforehand. But remember that while it is important to remain flexible it can be equally detrimental when taken to the extreme. Juggling strategies and trying something new every time you trade will deplete your account in no time.
It’s been said before, and it will be said time and time again: greed is the trader’s worst enemy. When a trader has a series of successful trades, they can fall into the trap of overconfidence and begin to feel invincible. Instead of closing the trade and walking away with profits, they continue to trade, stopping only when the losses have become too much to bear. Staying modest helps traders secure their profits in the long term.
Learning technical analysis and studying the market can only take you so far. Taking time to hone these personality traits is just as important. Every so often, check back to this list of characteristics and identify the ones you need to work on. Whether you are an experienced trader or a novice, there is always room for improvement.Trade now
NOTE: This article is not an investment advice. Any references to historical price movements or levels is informational and based on external analysis and we do not warranty that any such movements or levels are likely to reoccur in the future.
In accordance with European Securities and Markets Authority’s (ESMA) requirements, binary and digital options trading is only available to clients categorized as professional clients.
GENERAL RISK WARNING
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.
73% of retail investor accounts lose money when trading CFDs with this provider.
You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.