- March 6, 2019
- Posted by: Michael
- Category: Forex guide
Trading, like most professions, has an elite group of people who have a combination of traits which are difficult to attain. They don’t excel due to being more intelligent, gifted or lucky. There share certain traits.
To emphasise my point, let’s take a look at NBA players. The probability of an amateur player making it to the NBA is 0.03%. Much like a top trader, NBA players need to remain calm under immense pressure. There is little difference between a top NBA player and an amateur. However, an NBA player can remain ice cold no matter the pressure. Similarly, in situations when most traders bow their heads and shed a tear, an elite trader can keep going as if nothing happened. This is a key difference between high earners and bottom feeders in any industry.
Be truthful to yourself about the mistakes you make
Firstly, top traders accept that there is no such thing as a winning strategy. They understand that despite their best efforts, they will get some trades wrong. The difference is that they are able to analyse why a trade didn’t go their way and make a mental adjustment. As human beings, much of what we do is based on emotion. Top traders are able to turn this off and only make rational, data-backed decisions. Therefore, even after a series of losses, they don’t make reckless trades to chase their losses.
Lions are regarded as the head of the animal kingdom not because they are the biggest, fastest or most deadly. They are incredibly patient and determined. A lion can watch its’ prey with laser precision for hours and attack at the perfect moment. It is patient, calculated and efficient. Similarly, the best traders strike when the data suggests that the odds are in their favour. They can concentrate for hours before making a trade. On the other hand, most traders make rash decisions. Trading based on guesswork is akin to gambling.
“The Gambler” sang by Kenny Rogers has the immortal lines:
- You’ve got to know when to hold ’em
- Know when to fold ’em
- Know when to walk away
- And know when to run
High-level traders can manage their money. They invest what they can afford to lose. They don’t celebrate each win because they know that a loss could be around the corner. They also don’t let a losing trade affect them. They take each trade as it comes. This amazing mental strength is what keeps them ahead of others. One of the toughest things to accept is that we all have weaknesses. There are gaps in our knowledge; therefore, we must always try to improve. Admitting that you can never have a perfect strategy is key to progressing over time. This is why top traders are voracious readers. And with so many free trading guides available, there is no excuse.
Nothing comes easy that goes twice for successful trading
One of the biggest misconceptions about trading is that it is an easy way of making money. Humans tend to be lazy; therefore, the thought of pressing a few buttons o a computer in return for riches can be enticing. Some sites market it as the fastest, easiest way to become a millionaire. They depict images of men lounging on the beach with their mansion in the background and a laptop. A ‘casual’ trader will watch Netflix open in one tab with Facebook open in another. Every now and then they will look at their charts. On the other hand, top traders give their undivided attention to their work. They don’t want to miss out on anything. They are exceptional at time management.
The best traders clock in and out just like any 9-to-5 worker. And in the evenings they read. They have winning days and losing days, but they are able to interpret why a trade went in either direction. They dedicate themselves to understanding the tiniest of details. The final and most important trait of top traders is discipline. They follow a set routine every day. This sense of focus in their lives outside trading has a huge impact. I hope you can now see that trading is a mental pursuit. To recap, here are the traits you will need in order to become a high-level trader:
– Calmness under pressure
– Money management
Now that you know what it takes to become an elite level trader, you will need to put it into practice. The best way to do this is to get a practice trading account. Pretend that the money is real. Manage your money well, and search for the perfect moment to go in. Read extensively about how to trade and put it into practice. Review all your trades to improve your strategy. Guesswork isn’t a strategy. I hope you found this post interesting and it helps you become a better trader. How is your trading journey going so far? Feel free to drop your thoughts in the comment section below.