What Makes a Trader... A Successful Professional Trader?
It is certainly also a matter of technique. Those who do not have a solid background, who have not developed specific skills, cannot think of showing up to the market and building a career on it. However, technique is not enough. This is the real secret: being a professional trader means having a winning mentality. It all starts "from the mind". It is the right mental approach that gives that extra edge, allowing you to seize opportunities, minimize losses, and grow trade after trade.
Having the right mentality means having positive, useful thoughts. Consequently, those who believe they are professional traders but are not yet truly so, have harmful and useless thoughts. This article addresses these thoughts, presenting them in the form of statements. If you identify with them, there's bad news for you: you are not yet professional traders.
Betting on the Next Trade to Recover a Loss
It seems like a harmless thought. After all, even in everyday life, people tend to react to defeats in this way, hoping to make up for it entirely or partially at the next opportunity. However, when it comes to online trading, it is a very dangerous proposition. The reason is simple: it fuels the "gambling-style" approach, which is the worst drift for a trader. Worse, paved with good intentions, the road to Martingale, which professional traders consider akin to the road to hell.
Moreover, it's mathematics. If you even think of investing 10% of your total capital, perhaps to make up for one or more losses, five losing trades will be enough to burn half of your resources.
Therefore, this thought must be replaced with dedication and respect for your strategy, which should be enhanced with a prudent Money Management program.
Believing the Market Owes You After Losses
Those who want to become professional traders must get one thing into their heads: in the market, karma does not exist. In real life, "out there", maybe you can hope for karma, but in online trading, providence is a completely alien concept. If you have lost five trades in a row and do not change your approach, you have a high probability of losing again. So, banish this harmful thought: the risk is loosening your grip, hoping for manna from heaven that will never come.
Blindly Trusting Any Trading System
Here, a distinction must be made between self-created trading systems and trading systems assimilated from others. In the first case, dedication is a duty. In the second case, no. On the contrary, blindly trusting is risky. The reasons for this lie in a rather simple fact: that trading system, which was passed off to you as "universally" effective, may not fit you, your trading style, your risk profile. So, why trust it? Wouldn't it be better to rework it or adapt it?
It's the fault of the market news!
It happens to many to fail a trade because, at some point, news was published that shuffled the cards and upset your predictions, perhaps developed through careful technical analysis. It can happen. The important thing is not to lull yourself, blaming what happened outside your chart. It's your fault because you didn't consult the economic calendar. Thinking otherwise means ignoring an error and being destined to repeat it.
Blaming a Lack of Means for Not Starting
Obviously, those who have these thoughts do not even think they are professional traders (also because they have not even started). However, as it is a rather harmful thought, it is worth mentioning here. It is actually just an excuse, a tool for procrastination, for not facing one's insecurities. To do online trading, neither a latest generation computer nor a 4K television is necessary. Unless, of course, you want to try your hand at automated trading. Even in that case, however, the solution to the technology problem is there and within reach. The clear reference is to Forex VPS.
Spending Profits Before Making Them
Nurturing desires is legitimate and even motivationally beneficial. If these desires, however, dominate your thoughts, you have a problem. You are consuming your mental energy for something that, at best, will become real in a couple of years (unless you are the exception that confirms the rule). Someone might even say it brings bad luck. Someone, who has nothing to do with trading, said "don't count your chickens before they hatch". Well, this maxim also applies to online trading.
Skipping the Trading Journal
Writing a journal might seem childish, naive, perhaps useless. In online trading, however, it can make the difference between a career burned out almost immediately and a career that is about to take off (if it hasn't already). The truth is that the trading journal is extremely useful. First, because it sheds light on any mistakes, and secondly because it represents the main tool to "overcome" them. Thanks to the journal, you understand where you went wrong and can remedy it.
Psychology is not important
This is a mistake especially for beginners. In reality, anyone who has found themselves in difficulty at least once (and sooner or later it happens to everyone) knows well how much psychology matters for a trader. Or, better said, how much the emotional sphere, the impact that the "mind factor" has on performance, matters. So, having a good trading system, perhaps corroborated by a solid background of skills, is not enough. You also need to cultivate your mentality, strengthen it.
Sizing Trades by Confidence, Not Data
Tying the amounts you will invest per trade to your sense of confidence is truly dangerous. Money management and risk management are not based on self-confidence, which is an extremely subjective factor, but on objective evidence. Therefore, on historical data, on how much total capital you have available, on factors potentially able to disprove the analyses.
If a strategy is complicated, it means it works
This is a deep-rooted prejudice even among traders with a lot of experience behind them. That is, if something is complicated, then it is "technical", and if it is technical, then it works. In online trading, in practice, it doesn't work that way. Complicating things only serves to... complicate them. Not to mention the fact that managing complexity is a tough job, and certainly not within the reach of beginners. The advice is, at all levels, to choose simple but effective tools. The reference is especially to indicators. Very often, the classic pivot points and a few moving averages are sufficient.
Postponing Risk Management Until After Profits
This is a widespread thought among beginners, as the idea of acting cautiously only after producing some results is common. Well, it is not only a dangerous thought but also an illogical one. Prudence is the path to success, not an obligation to be respected as such. Those who reason the opposite way have no chance of making money, unless - and this cannot be ruled out - a few lucky breaks one after the other. But it's clear: luck is not a weapon to rely on too much.
Assuming Timeframes Multiply Results Equally
The thought runs like this: a system that works on a daily chart will earn ten times as much on the 30-minute chart.
Well, that would be really nice. Unfortunately, by changing the time horizon, many other factors also change. Consequently, placing trust in the principle of proportionality, in this case, is something very dangerous. If you change the chart, you must adapt the strategy.
Stop loss is for the weak
Thank God, it is a rare thought among traders with a minimum of experience. Beginners, the absolute novices, however, often have this thought. Stop loss is considered as an action that, in itself, harbors the certainty of defeat, a kind of putting one's hands forward. It seems, in their inexperience, a demonstration of a non-winning mentality. Instead, stop loss is a useful tool, indeed indispensable, one of the few capable of salvaging what can be salvaged, of optimizing losses, of not getting too hurt. Stop loss lays the foundation for a recovery, so... It's for winners.
Quitting a Job to Trade Full-Time
This thought goes hand in hand with that of desires. Of course, there are many cases where traders have abandoned their original work and dedicated themselves to full-time trading, given the results. However, they certainly didn't do it right away. They first collected the initial results, initially gained financial freedom, and only then left their profession. In short, leaving the certain for the uncertain, in trading as in life, is always a bad idea. At the very least, it is necessary to wait for your trading skills to break free from the "sphere of uncertainty".
Calling Yourself a Loser After One Trade
To be clear, if you do nothing but lose, and you have tried everything, it may be that trading is not for you, and there is nothing wrong with that. Precisely, after having tried everything. Giving up at the first difficulties is really a shame. Many winning stories begin with a defeat, and this is true in life in general. So, before throwing in the towel, give yourself a few chances.
Trusting Backtesting as a Guarantee
Before adopting a given trading system, it is necessary to test it under past market conditions. If it works, it can be used in the present. However, not even in this case are there guarantees of infallibility. Many things could happen, such as an event that has made the present "incomparable" with the past (or at least with the historical data you used for backtesting). So, be ready to retake the helm of the situation and change course.
Needing Certainty Before Entering a Trade
Of Pompey, the historical adversary of Caesar, it was said that he never entered a battle unless he was sure of winning, unless his army outnumbered that of the enemy. Well, Pompey lost. This is to say that it is useless to seek 100% certainty, because it will never be there and, indeed, one runs the risk of losing opportunities.
