The journey of trader is not an ordinary journey. Whether you are a professional trader, instutional trader (hedge fund or investment bank trader), or a complete beginner, trading the Financial Markets is a unique profession that comes with many challenges. Trading any instrument/markets (e.g. Forex, Stocks, commodities, Indicies or even Cryptocurrencies) can ultimately define the personality of an individual with the test of time. Many successful traders develop certain characteristics over the long term, their constant drive, perseverance and desire to achieve success in the markets will allow them to overcome adversity and setbacks. The five 'fruits of labor' (stage 3) shown in the illustration are the common traits found in successful traders which are NOT inherent but are DEVELOPED over the long-term.
We all know that a strong tree has strong roots i.e. the foundation. Many of traders simply do not place any value of educating themselves about the markets which they desire to trade, therefore do not even see to stage 2 (see illustration below). For example, they would choose a random broker not knowing what they offer and invest their capital purely believing in striking luck and making profits. Reality check, this is not a case; in fact, this has never been the case. A successful trader has always viewed themselves as an apprentice/student no different to an individual learning to become a building contractor or an architect. They learn from those who are knowledgeable, experienced and successful in their respective fields so they can prevent themselves from making common mistakes. After learning the skills of their trade they then step out to the real world and apply/hone their skills.
Success breeds success. A successful trader has tested the time i.e. has knowledge of what, when and how trade a particular instrument/market.You may have to experience ups and downs, challenges and setbacks on the route to become a successful trader. To achieve success in trading you must invest time and effort in educating/learning the markets (see education) and also open a demo account or even a real account with the minimum deposit (see the best forex trading platforms in the UK in 2018) to apply yourself.
Journey of a Successful Trader- The Tree Example
Stage 1- Opportunity
- Realize potential rewards from trading
- Invests time and effort learning the basics principles & terms
- Demo Trading or trading with minimum capital investment
- Trial and Error with many Trading Strategies
- Refer to social trading, join forums & websites to seek help
- Am I a technical trader or fundamental trader or both?
Stage 2- Do I Quit or Persevere?
- Critical stage for all traders as it involves in dealing with EMOTIONS & PSYCHOLOGY
- Traders experience streak of winning trades that makes them feel invincible
- They forget about risk management, discipline and may risk too much off their initial capital investment
- Traders stray away from their trading plan showing lack of discipline and focus
- No Real Consistency in implementing trading strategies and lack of account growth/profits
- A trader has couple of losing trades and ultimately resorts to revenge trading. This is a common experience by many if not all traders
Stage 3- Fruits of Labor
Those traders that pass stage 2 show determination, perseverance & commitment and usually succeed in the markets. They are known for attaining the developed qualities listed below:
- Persistence- All successful traders have the 'never give up' attitide even though you may have a string of losing trades. Accept losing is part of trading the markets
- Patience- A successful trader develops patience by waiting for particular setups or holding out positon of trade for targeted profit
- Discipline- Repeat your successes. Stick to a designed trading plan that consists of chosen strategies, risk management profile, stop out levels etc. and never divert
- Mind-set- A successful trader develops the tolerance and mind-set of taking a losing trade. Focus on Long-term success as opposed to short-term gains
- Execution- Accept responsibility and are decisive in entering