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What Makes You A Successful Trader
In an idealistic trading world, traders would consistently be able to trade with thriving results - accurately predict market trends, be able to execute favourable strategies with perfect timing, acquire desired maximum profits with minimal losses, and avoid the wrath of unexpected market fluctuation. However, successful trading does not just come from knowing the best strategies that work with your personal financial goals and lifestyle - a successful trader must have various characteristics which enable success in the long-term. Here are the 5 most basic characteristics you need in order to be a successful trader.
A successful good trader must have at least the five following characteristic:
Self-Discipline is the vehicle that ultimately enables you to reach your destination. Designing a personal plan is crucial to actually know your goals and objectives, but setting aside time each day, second day, or various times a week (or according to your personalised plan), will help you steadily inch towards and achieve those goals. Discipline is the difference between going to bed after that friend’s birthday party or a long day at work, or staying up for 30 minutes to analyse the market.
Consistent discipline is crucial for keeping on track and reaching your personal goals. Due to the nature of trading, the time given isn’t a one-off sacrifice, but repeated time sacrifices regularly. Trading is a commitment, usually on top of full-time careers, family life, social lives, and other hobbies. There are different levels of trading commitment one can make, but the key is to assess your desired level of commitment, pinpoint your goals, devise an action plan, and stick with it. Discipline will help you overcome the temptations of being slack, and will mean the difference between on-the-surface learning and deeper understanding of the market.
The market is a complicated entity with hundreds of factors that will affect your trading. Believing that you are right every single time is unrealistic, and one of the biggest fallacies in trading. It’s like running a business - no matter how good you are (or even if you are the CEO), it’s likely that you still need advice and input to make optimal decisions. At times, you may be so certain about a decision that you overlook good advice from others. Although there are no guarantees that every piece of advice (even from someone more experienced) will prove to be correct, it is always valuable as a first step to be humble enough to listen to advice given. The next step, obviously, is knowing how to discern, analyse and decipher the good advice from the bad advice.
Not only is advice beneficial in active trading, but is also important in helping you develop a personal trading plan. Engaging with other traders will help you successfully navigate through the myriad of information, successfully analyse your current market situation, and make wiser decisions. Only then, will you not be flying blind in the market.
Perseverance and Patience
As we all know, in many areas of our lives. Likewise, patience is one of the the most important attributes of being a good trader.
You have done your study and invested in a stock which, based on your analysis, you know it will go up in the near future. However, the stock dives hard in the next morning. You panic and sell all your shares immediately along with many other investors, not knowing a few days later, it goes up - just as you had predicted. Or perhaps you are searching for an entry point in the market, but none of the stocks currently satisfy your criteria. Therefore, you feel disappointed and decide to give up. These scenarios demonstrate a lack of discipline, a lack of patience, and a greed orientation. If you let your greed and emotions rule your decisions instead of patience, you won’t be able to reach your investment goals.
Investing is like fishing, they both require exceptional patience. Instead of pulling out of a dropping stock quickly, you might need to wait for the stock you invested in to go up again despite the temporal drop. Obviously, this doesn’t mean that you should never pull out from a plunging stock, but patience will enable you to see further, and encourage you to follow through with plans after analysing the market; holding onto those stocks which have a momentary drop.
Let your goal be fueled by motivation and perseverance. Do your research, analyse the market, and make rational decisions based on your study. Even if the market is going down, evaluate with wisdom and patience instead of panicking.
“I am not discouraged, because every wrong attempt discarded is another step forward” – Thomas Edison
Self-motivation is an ability to strive towards your aim and goals without being influenced by other people, your environment or situations. A person with self-motivation is able to be driven by an untouchable internal tenacity, compass and purpose; having a solid reason and unending resilience through tasks and tackling obstacles. Self-motivation is not just a characteristic, but a force that sees you through challenge after challenge. Self-motivation will point your eyes back to the right perspective when other people or situations discourage you (which every investor will eventually face), and remind you of why you are doing what you are doing.
It’s normal to be fired up in the beginning, giving it your all, absorbing everything and staying positive. However, possessing inner motivation means that three months, two years, and 5 years down the road, your drive, passion and vision remains focused and unwavered - you stay just as determined, or if not more, to fulfil your ongoing goals.
Many people decide to give up in the course of trading due to a lack of motivation. This doesn’t mean one shouldn’t readjust your goals and tactics from time to time and increase in knowledge and skills, but there is a difference between the right times to give up and quitting due to failure. Therefore, it’s important to ask yourself these questions when beginning trading:
What is your motivation for trading? Why do you really want to trade and invest?
What do you want to achieve?
What are your strengths? What can you build on?
How do you think you can apply your strengths to achieve your goals?
How will you maintain your course even when challenges come?
We have all experienced moments when our goals seem more like a burden than a joy. After months, tiredness and realities of failure sink into your mind and your heart. Questions burn such as “Why am I still doing this? Why am I wasting my time and effort? Is it even worth continuing? Should I give it a break and quit now?”
Whatever your pursuit, you will not achieve your greatest potential unless you are passionate about your cause.
Planes without fuel cannot soar and fly. Likewise, when you want to achieve something, you need passion which is your fuel (along with the above characteristics) in achieving success. Behind passion is always a purpose; people with purpose never lose sight of why they are doing what they are doing, and do not waver when they hit a stumbling block.There is always a deep joy and satisfaction where purpose is involved, and an endless reserve of strength and spark that burns from within!
Being passionate and purposeful when trading is a fuel that will help you overcome the obstacles ahead of you. Ultimately, passion will fire your journey and extinguish discouragements, a sense of failure, temptations of being slack and ultimately, keep you in a solid and constant state of drive, zeal, dedication and purpose.
As humans, success in business and life is proportional to the personal characteristics that you possess. They, along with skills and wisdom are the keys to propelling you through the storms of life. Therefore, be quick to ask yourself, what attributes am I lacking? Invest in these attributes, and you will success.
A Piece of Advice
Don’t give up your day job. You need to maintain your regular income especially during the early stages of your trading career. The capitals for your trading and investment should not be from your rentals or children’s education fees. Invest only the amount you are willing to lose.
Interesting fact: ASX-Russell Long Term Investing Report for 2013 shows Australian shares have outperformed all asset classes including the property market, over the past 20 years. The same research result stands true across many countries in the world. Equity investment is highly profitable if you have the skills and knowledge in mastering it. This knowledge is not as complicated as most people perceived it to be. Now is a good chance to learn and pick it up. Master it and master your money.
Please bear in mind that superannuation or your pension returns will not provide an adequate retirement income. This is one of the reasons that we are urging people to learn how to invest and do investment. You need extra income for your retirement, travel and health care. With hard work and study, you can definitely outperform the market averages.
Finally, a successful trader can work from anywhere in the world and produce an income long after retirement. There is no limit in space and time when you have the will and drive and passion! Please continue to follow us as we educate you to be well educated in financial trading and investing and partner with you to accomplish your goals!