The trading plans, strategies, and goals of successful traders can differ widely, but those that are considered successful do share some important characteristics that help to further their trading career. Do you think you have what it takes to join their ranks? Take a look at our list of necessary characteristics below to form your own opinion.
Here’s a quick summary of the most important characteristics that a forex trader should possess:
- Mental Toughness
- Being well-educated
Discipline is the first characteristic on our list because it is probably the most important trait that a currency trader should have. An undisciplined trader is prone to these mistakes:
- Trading when the timing isn’t right
- Risking too much on a single trade
- Investing more money than they should
The idea here is that there are thousands of positions one could enter on any given day, but they shouldn’t. A disciplined trader watches the market and only enters trades when the timing is right, even if it means sitting on their hands for a significant amount of time each day waiting for another opportunity. Enter trades just to be trading is a bad habit that is bound to lead to the loss of your hard-earned funds.
Traders need to know that losses are an inevitable part of trading. If you act like a sore loser and sulk over every loss, you’re going to make yourself miserable. In fact, most day traders experience losing trades each day. What matters is that you make more than you lose, and if you do, then you should consider yourself a winner. The best traders pick themselves back up after experiencing losing streaks and try to learn from their mistakes if the losses are on their side. If those losses were unavoidable, then those traders move on without obsessing over it.
Most traders start out by reading articles, watching videos, and simply relying on the word of other traders. There’s nothing wrong with picking up some tips here and there, especially in the beginning. However, the best traders learn to stand on their own two feet and don’t need to rely on others once they get further into their careers. You might want to incorporate some advice from different sources together once you realize what does and doesn’t work for you.
In order to be a successful currency trader, you obviously need to know what you’re doing. The amount of knowledge one needs exceeds far beyond basic concepts and covers a lot more territory. Smart traders understand the analytical side of things, what moves the markets, trading psychology, they know a lot about different strategies, and so on. Fortunately, anyone can learn this online because free resources are readily available if one simply applies themselves to learning in-depth. Mathematical concepts are important here too, as traders need to understand percentages, calculate risks and rewards, and do some simple math calculations quickly.
Some might begin trading with high expectations about how quickly they will make money. This is a bad start for any trader. It takes time to become successful, especially for those that start out with a small investment. The best traders are not only patient when it comes to waiting for success and watching profits build slowly, they are also able to watch the markets to wait for the right time to enter a trade without feeling overly anxious or rushed.