Every trader, no matter what level, faces strong emotions, stress, but also successes that need to be highlighted and encouraged.
Although it can represent a real passion for some traders, this activity can be difficult, and we will see that to trade, you need several qualities.
Not to mention that the trader’s psychological health is of paramount importance.
Trading, a difficult profession
Trading
is both a passion and a stressful and risky business. When trading, you can win as well as lose. To do this, you have to be ready. This profession requires a continuous reactivity because the markets are constantly and rapidly evolving which leads to a quick decision making.
The trader must have a thorough knowledge not only of trading and economics, but also of money management and risk management.
The qualities to succeed in the stock market
Setting goals
As in everyday life, to trade successfully it is important to set goals in order to visualize success. Set SMART goals for yourself :
- Specific : answer specific questions, what do you want to achieve in the financial markets? How much do you want to achieve? When is the right time to stop? Set your own rules. Whatever they are, they will help you grow in your business.
- Measurable: Take the time to evaluate your activity each day by noting how far you have come. You can use tools such as Excel, or simply a journal. This will allow you to see if you have reached your goals and make changes if necessary.
- Achievable and achievable: this goal must be ambitious and motivating, but also reasonable.
- Temporally defined: your objectives must be clearly defined in time.
Be patient
Patience is an important element in trading. Trading is a time-consuming profession and the gain is not necessarily quick. This patience, which the trader will acquire with time, will allow him to improve his analysis, to understand and especially to control and rectify if necessary. The gains will certainly not be immediate. It can take several days, as well as several weeks or even months.
Self-control
Easy to say, harder to do. Traders face markets that are sometimes extremely volatile, especially with the situation we have been in for the past few weeks.
The stock market remains an area where the poorly protected trader can be impacted. To face this, self-control and distance before acting is inevitable. To control oneself is also to show composure, but also to know when to stop. Traders often face a form of addiction in front of their screens.
The possible protection from a technical point of view is to opt for a powerful artificial intelligence or a powerful trading robot that will do everything for the trader and that will not experience those emotional aspects that the human trader can experience.
The mind, a key success factor
The mind is one of the most important assets of a trader.
The trader’s mind is the result of the consistency between the trader’s beliefs, personality, state of mind, character and health.
Obviously, it is important to have knowledge in trading. You will spend time, know all the features and specifics of trading and financial markets. But although you learn something new every day, it will be mostly time consuming at the beginning of your career. What will affect the sustainability of your trading is mainly your mind.
Studies show that psychology is responsible for 70% of the results. And yet, many traders think that a strategy is enough. It is not enough to have a good trading strategy to make money, the trader must be mentally balanced and keep his head on his shoulders.
In conclusion ...
As you can see, trading is a profession that goes through complicated phases. It requires many skills and qualities that will be essential to your success.
Success in trading is usually accompanied by periods of euphoria. But the situation can quickly turn around and the trader can lose everything. Yes, all traders lose at some point. « You have to constantly question yourself and manage your ego because the market is always there to call you back to order » reminds Tarek Elmarhri, trader and founder of Krechendo Trading. Humility is more than necessary to succeed in trading.
Did you know ?
« It is possible to reduce the risks thanks to the Hedging strategy which consists in covering an open position by another opposite position of an identical amount »
Florian Delamotte
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