The discussion on this subject goes on and on – is trading something that could be learned or is the kind of jobs that you either have it or you don’t like painting or singing? The answer lies somewhere in between but it is leaning towards the first one – it is something that you could learn, that anyone could learn.

Of course there are different types of personalities and trading might not be suitable for every single person out there BUT it is learnable. It is not something that you are born with like having an amazing voice to sing.

In this post I want to share with you some of the basic and most important qualities of the successful trader. Many have tried and most of them have failed. Go through this post and really think about it. Is this for me? I don’t want to scare you or discourage you but according to the statistics, the failure rate among traders is above 90% no matter how you turn it around.

Use this post as gateway to motivation!

Trading as a business

Trading is not a game, it is not an alternative to casinos but it could certainly be a lot of fun! Maybe that sounds a bit geeky but when you love what you do it is really fun to do it. Trading could be a hobby ONLY if you treat it with respect because otherwise your hobby could turn out to be a very expensive one.

You should realize that once you open an account with a broker you INVEST money, your money. This is an investment. You are doing it in hopes to generate returns on your investment. This is the bottom line. When you sit in front of the monitor you are working on your investment. Never forget that.

The nature of the retail trading has many traps. Most times, being in the comfort of your own home could make you not take the situation as serious as you should. You will get ahead of it eventually, just know that it is normal if you feel this way at the beginning.

Discipline

In theory being disciplined sounds like a piece of cake. However, in reality when the demo account is not in use anymore and you switch to live trading, things tend to change. Let me give you an example. You open a trade, the terminal window is there staring at you, numbers moving up and down chaotically, like there is a real fight between a bear and bull. Price finally gains some momentum and you see positive numbers in the Floating PnL. Voila! You are making money.

That’s great but not for long. Price goes for a correction and the pink feeling you were full of is gone. Back to zero, and a few minutes later it is going into negative. Crap! I should’ve collected the few pips I had and not waited. Now the beginner trader is facing three options: close the trade with a small loss, wait for the initial stop loss that was set or let the trade run and potentially hit the target. What would you do?

You will be shocked how many traders would choose to close the trade with smaller loss and not give it a chance to develop. Another huge part of the traders worldwide community would go ahead and mess with the initial stop loss, in hopes that the trade will reverse any second and get back to the positive side. Wrong again.

I’m telling you all this because discipline is really important. Many traders would put the blame on the strategy when they start losing. The fact is 99% of the times the trader is the one who didn’t follow the rules of the strategy strictly and didn’t trade the strategy long enough to see the real potential (at least 100 trades or so).

Self Motivation

This is an important skill in my opinion because learning the theory requires it. Theory is step #1 which you can’t skip or ignore. Without theory you are going to be just another gambler. The learning process will be long (not always but most times it is so prepare for the worse while expecting the best )so don’t expect to master it all in 1-2 weeks.

The learning process could also be complex. There are many factors involved in trading even when it seems as simple as buy/sell and make money while drinking cocktails at the beach. There is psychology which lays low in the backstage for example. Often overlooked psychology could be the difference between winning and losing. In fact any of the subjects discussed here could make that difference.

Again I don’t want to scare you but get ready to work for your success. The profession of a trader is extremely sexy, you choose your owner, you are your own boss, it is a recession proved business, there is no cap on how much you can grow etc… The list goes on and on BUT you must be willing to put not 100% but 200% until you reach your goal.

Emotions

I have already mentioned Emotions above but i would like to stress even more on this one as it is inevitable part of trading. Emotions and discipline are worst enemies in trading and many times you will find yourself entrapped to feelings like greed and fear and it would feel like the market is playing personally against you.

Every move you make, will be counter attacked in a way to make you lose. This could be really overwhelming and I often advise my students to stay away from the charts until this state of the mind is gone.

Emotions could lead to revenge trading which is among the worst types of trading. Loss is almost guaranteed and you will find out, that there is a new level of irritation available and at your disposal.

Emotions will make you lose money unless you find a way to deal with them. At the beginning it might seem impossible but it gets easier in time. The key is to act or at least try to act as a robot. You have a plan – 1,2,3,4,5. If X happens I will execute Y. This is why you are training and learning and practicing on demo, so when the time comes, you execute without thinking.

When you learn to swim in a swimming pool and you go with your friends to a lake/ocean/sea and you find yourself in the deep water, are you going to change the style of swimming suddenly, when it counts the most or you are going to stick to exactly what you have been learning in the swimming pool? The things that you know work and keep you above the water.

This is happening more often than any of us could imagine. People learn and learn and learn and perform well on practice accounts but then when live trading starts it all goes south. Why? Because for one reason or another traders start bending the rules and don’t follow the trading plan.

We will continue the subject in another article as i think this is enough for your to work on and think about. Please share your thoughts and comments below and don’t forget to hit the like/share buttons!

Yours,

Vladimir

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