Contrary to popular opinion, it takes more than just good market knowledge, chart savvy, and a three-piece suit to become a successful trader. It is unlikely for an individual to possess all the necessary qualities when they start – traders work consistently over long periods to gain skills and develop traits that effectively implement a well-thought-out strategy. This means that you don’t need to be born as a successful trader – instead, you can develop into one by putting in enough work and man-hours.
A few crucial skills that distinguish a flourishing trader from a novice are:
Discipline and patience
These are two of the most crucial traits a trader needs in abundance to survive in the market. The market is a sea of infinite opportunities, and it is easy to get lost in crests and troughs. A trader needs to learn to bide his time and remain steadfast even when no profits are insight. The smart trader knows to follow the plan with logic and analysis and not get swayed by emotions like greed or fear. It is crucial to understand that the ups and downs are a fundamental part of the market and not get discouraged. Patience and discipline are the virtues that’ll help you strike strong when the right opportunity presents itself.
Research and analysis
A trader looking to survive in the long run needs to have a keen sight to spot the smallest opportunities/inconsistencies in market trends. They also need to be lifelong learners – you never know what slight information may help you make a profitable trade. Quality research and analysis are, therefore, fundamental to the world of trading.
Logic. Quick response. Adaptation
On the same note, a successful trader always bases his decisions on logic backed by intuition and not on whimsy or emotions. A market is a dynamic place, and there is no perfect plan, strategy, or move that will yield perfect results every step of the way. It is important to be able to course-correct and adapt to the ever-changing market patterns. A smart trader is distinguished by his presence of mind and quick response to changes.
Apart from mental acuity, one of the most crucial skills a trader must possess is mental endurance and self-reliance. A smart trader needs to be thick-skinned. If you are deeply affected by every loss or profit you make in a day, you will crumble under the mass of emotions. Forex trading can be quite nerve-wracking, and mental agility will enable a trader to bounce back stronger from any losses or drawbacks.
Independent and forward-thinking
As a trader, you may take help from books, articles, blogs, or mentors to make your trades, but this will not take you very far. Even though resources will also be there to guide you, you will need to depend on yourself for every decision you make. Independence, developing and following its own trading style and plan, keeps a trader in the market while relying on others doesn’t sustain in the long run. To succeed, a trader cannot afford to stuck in the past or the future. Markets are dynamic, and things change fast. To succeed, a trader cannot be discouraged by today’s losses. Forward-thinking mentality and the ability to look at the bigger picture and not focus on every little detail make a trader forward.
Trading Mindset off the Desk
Being a forex trader can change your behavior quotient, and there’s a lot of skills you end up learning when you trade on the regular that you get to carry to your life outside trading. Most importantly, you become self-aware. You understand your strengths, weaknesses, and what drives you. You also learn how to manage stress in your life, deal with uncertainty, taking calculated risks, and conflict resolution. If you’ve been in the market long enough, the peaks and troughs teach you discipline – how to stick to your plan on a day-to-day basis and not let emotions that steer you away from your goal.
As you’ve to keep tabs on the geopolitical and financial occurrences around the world, you gain unparalleled awareness and become a well-rounded person. You also learn first-hand to have resilience in the face of adversity and agility to bounce back from exacting situations. You learn to take decisions under duress and master how not to take everything that happens around you to heart. Every trading day is a new day in the life of a trader – so you get better equipped to move on from yesterday and start your day afresh. You will not let the environment or your emotions get the better of you. Your mind gets attuned to moving on to the next step instead of reveling in your current wins or lamenting about your losses for too long. Moreover, you gain a keen eye for spotting details and you may refrain from making impulsive decisions, leading to better conflict resolutions and interpersonal relationships.
Bring it to the Markets!
Don’t be afraid to bring the skills you’ve learned from the outside world to the market. You can bring your experience from your desk job or business to the market – be it legal, political, economic, financial, or otherwise. Major policy changes and agreements between economies tend to affect the common man in numerous noticeable and unnoticeable ways. Don’t be afraid to apply your hard-earned experiences to trading – you never know how your knowledge of the basic human tendencies and behavior will help you in the market. Your consumer experience counts too! Understanding tastes, preferences, services, and even brand identity from a consumer’s point of view can help you navigate in the market. Automation and charts can only help you so much. Once you are adept at trading in the market, your intuition, foresight, and discretion as a human being can take you very far in the trading space.
Being a trader is so much more than developing a strategy and using your hard-earned technical know-how to make buckets of money. On a good day, trading is the best job, but on a bad day, it might as well be hell. You will need to cultivate a resilient and agile mindset that will be conducive to such an uncertain environment. Even though there is a steep learning curve, trading can be a gratifying career or side hustle.