What does it take to be a good trader? Well, here we can mention passion, a lot of determination, a mountain of commitment, and more than just enough focus. These are the main traits of a good trader.
But what makes a successful trader? This is the real question, because people can be good traders without making a lot of profit. Some trade for fun or for just some pocket money at the end of the month. On the other hand, successful traders do this for a living.
Given this, it goes without saying that even their most common traits are worth looking into and perhaps added to our own persona!
1. Trading Consistency
The main mistake of good traders is that they stop trading after a big win or a major loss. Successful traders don’t do that! They keep on trading, get accustomed to the ideal trading times, and learn to make the most out of every movement within the market.
Instead of letting a win or loss break your balance, you shouldn’t focus too much on it and start adding its experience to your knowledge. Understanding how trading works on a deeper level, in terms of quarterly statistics and such, will be more useful for your trading strategies.
2. Discern Hype from Reality
Good traders will easily get caught in the hype of trading or of some certain rumor – or of websites and people that promise instant profits. Successful traders, on the other hand, know when to make a decision and, most importantly, make it themselves, to the best of their judgement.
Nowadays, it’s easy to get corrupted by the sudden movement of the market and fall into the pit of hype. However, the reality is that, when such things happen, you should stick your feet in the ground and try to do the wisest thing possible.
3. Know How to Cut Losses
As mentioned above, good traders often take a long break from trading after experiencing their first loss. Why? It’s because, for them, a 50% loss on investment is just that and nothing more – a loss.
The successful trader, however, comes with the required knowledge and experience to understand that a 50% loss doesn’t translate to quitting – it translated to a 100% profit/gain in order to get even.
In short, the preservation of capital is key in trading. A simple loss should be followed by a wise decision on how to cut said loss!
4. Patience is Key
Patience is more than just essential when it comes to trading – how does it help traders? Well, it keeps them in the game even though they don’t make a profit immediately or if they experience a loss.
A patient trader will always accustom themselves to the market and trading strategies before jumping head-first in a trade. They also prefer taking low-risk investments with medium profit, rather than engaging in all-in trades that could ruin their portfolio.
Even the best traders out there won’t say that they know everything there is to know about the market or certain trading strategies. Just like with many other similar hobbies, trading implies continuous learning and adaptability to new things.
A good trader will get a hold of a potent strategy and build themselves a decent portfolio based on it. A successful trader, on the other hand, will try multiple strategies, depending on market movements and trends, to maximize their profit.
6. Complete Discipline
Naturally, discipline is also very important when it comes to building yourself like a successful trader. This particular trait helps you keep up with trends, engage in research, create your own strategies, as well as your personal plans of getting out of trouble.
Traders that lack this trait often know one thing only – namely, how to identify opportunities and exploit them. However, given the lack of knowledge, the number of opportunities will be limited.
7. Records Keepers
A good trader will almost always act based on predictions and hunches. Most of them never rely on records or data regarding their own trades. This is why they end up making bad trades – because they make the same mistakes, on and on.
Traders that keep records of their trading activity will always know if a move could be profitable or not – or at least its chance of success. Despite the markets being highly volatile, trading decisions are often quite similar and can be comparable, a case in which records can be extremely helpful.
8. Makers of Simple Plans
As mentioned, hunches are a big part of a good trader’s life. They are based on pure instinct and often seize opportunities at the moment they see them – not a single moment of thought in-between.
Successful traders, however, make plans and strategies for their trading endeavors. They put instinct on a bench and leave it there until the trading day ends. This allows them to follow a certain direction and have a secondary goal besides the one of making huge profits.
After all, having one or more clear goals is always better when it comes to making wise decisions rather than acting on a hunch or suspicions.
9. Keeping Up with the Markets
Traders won’t get far from trading the same stocks that their parents did 20 or more years ago. With this, we don’t mean that people shouldn’t take old companies into account – we say that traders should evolve at the same time with the markets they trade on.
Going out of their way to learn more about market evolution and statistics will be of great help in the future. Successful Forex traders, for example, check FX-LIST daily for updates and news regarding various brokers. This keeps them on their toes and active in the trading game!
10. Detail Importance
Traders don’t simply enter trades. Well, most of them do! They willingly and quickly invest a great portion of their money in a trade without taking a closer look at market price, market trade volume, expiry time, and so on.
Naturally, skipping these details means that traders will act on poor strategies that don’t paint a complete picture. A successful trader will always have enough time to familiarize themselves will all the details of a trade before going in.
11. Creators of Balance
As many people said, balance doesn’t just exist – you create it! In the corner opposite to balance, we find traders that, regardless of their financial independence and lifestyle, will still throw themselves in the biggest trades possible, hoping for an extraordinary profit.
Backed by balance itself, we find traders that take into account their independence before taking a risk that might be too big for them. Such traders balance every single aspect of their life in such a way that they can enjoy profitable trades, as well as the warmth of their family and friends.
The Bottom Lines
These are the 11 things that make for a successful trader.
Obviously, they are not easy to gain and may require a couple of years of hard work before being fully mastered. However, we strongly think that it’s worth the investment, in this case. Trading education, discipline, and diligence will certainly transform any good trader into a successful one!