Top 10 Qualities of a Successful Trader

If you dream of becoming a winning trader and getting rich with Forex Trading (an extremely difficult but not impossible mission), you should convince yourself of one thing: you have to work hard and make sacrifices. Above all, make them in the right direction, being inspired by an ideal trader who, while being very or partly different from what you are now, can guide your efforts. In this article, we will describe exactly the ideal trader, that is, the winning trader, characteristic by characteristic. You may occasionally find yourself in some of them, but keep in mind... To be successful, you must possess them all!

Knowledge

A winning trader is also an expert trader, with an incredibly broad and deep wealth of knowledge. If you want to make it big in trading, knowledge is the first requirement. It's impossible to trade in the market without having, at the very least, a clear understanding of the theory. In short, without having studied. It can be said that, in a sense, it is precisely the training path that determines the possibilities that a beginner trader has of surviving the initial phase of his trading career, which is in all respects the toughest and most dangerous. When studying, however, that is, when forming the wealth of knowledge, it is necessary to be careful to avoid a risk: that of going around in circles. Often, the focus is on non-priority elements, and this comes at the expense of important ones. Obviously, there is no 100% predefined path, although all learning programs have a piece of the road in common. It depends, in fact, on the type of trading you intend to practice, the currencies you will focus on, and so on. Above all, it is good to know that the path does not end once you make your debut in the market. You should never stop learning, also because the market, while replicating dynamics and evidence, is constantly evolving.

Experience

As well as the "pre-debut" training path has been done, perhaps under the guidance of an experienced trader or based on an impeccably written program, knowledge is not enough. This is an evidence that certainly belongs to Forex Trading but that can be applied to every fact of life. Experience is the secret to transforming knowledge into a resource. The problem, in this case, is easily understandable: experience is acquired by operating, therefore it is paid for with market risk. This is an incontrovertible truth that cannot be refuted in any way. However, it is possible to limit the damage during the process of acquiring experience. How? By using a tool that almost all brokers now make available: demo accounts. They allow you to simulate a real trading activity, but with fake money. In this way, you experience the market, get the hang of it, but without risking anything. Of course, it is a surrogate, but it allows you to cut your teeth to the extent necessary to trade in the market - and acquire real experience - while reducing the chances of defeat.

Discipline

The collective imagination, especially the one elaborated from movies and TV series, portrays the winning trader as a sort of reckless genius, as prone to victories as to excesses. Well, this is a portrait that does not correspond to reality, not even a bit. Also because the winning trader is anything but impulsive. There are no winning and impulsive traders at the same time. Indeed, one of their most important virtues, and which has brought them to a position of superiority, is precisely discipline. It is fundamental to making money. Discipline to what? To what rules? After all, Forex Trading is a fairly free activity. In reality, we are talking about discipline with respect to the rules that you have imposed on yourself, your trading plan, your money management program. Discipline is important because trading has a profound impact on the emotional stability of traders, both experienced and less experienced. Therefore, it is good to make decisions during the previous phase, which is precisely that of planning. The trader, once entered into the eye of the storm, and net of emergencies (which are not at all rare), must do nothing but remain faithful to his own evidence. To his trading plan, precisely. Discipline is the quality that facilitates such a burdensome commitment.

Flexibility

We talked about discipline as one of the qualities that a trader must possess to be called a winner. However, there is another side of the coin, which in a sense obscures and relegates discipline itself to the background. Let's be clear, this overturning of hierarchies represents an exception, albeit not very rare. Simply put, there are some cases where discipline is not the best of resources and, indeed, could hinder problem solving. The reference is to situations in which, perhaps with an open position, the market behaves irrationally, rendering the analysis and planning work that preceded the entry useless. In this case, it is simply pointless to remain consistent with the program, simply because the program did not foresee that precise state of affairs. This is where another quality typical of the winning trader comes into play: flexibility. He must be disciplined, of course, but also sufficiently flexible to be able to violate his own rules, if this proves necessary. Flexibility can be defined as the ability to react creatively to problems, where the concept of creativity has little to do with that of the collective imagination, but rather approaches the concept of "lateral thinking". Thinking differently, therefore, means being flexible (and vice versa).

Interpretation Ability

The market is a (non) place less transparent than one might imagine. After all, it is populated by people who, even in the best of hypotheses and wanting to believe the most optimistic, do not always behave in a perfectly rational way. Therefore, the winning trader not only has the ability to analyze the market but also to interpret it. Specifically, interpreting price movements within more general overviews, so as to embrace broader horizons. The interpretation skills are then essential when dealing not only with the market in a strict sense, but also with the economic environment. In short, when practicing fundamental analysis. There are no indicators there to provide more or less reliable signals, but rather some historical data and analysts' estimates. What the outcome of a certain market mover will be and how it will impact the market must be predicted by the trader.

Resilience

Resilience is one of the qualities that a good trader must possess. It certainly distinguishes the winning trader. Obviously, we are talking about emotional and mental resilience. The pressures that Forex Trading exerts on investors, after all, are really heavy. Firstly, because the stakes are high, secondly because it is still a hyper-competitive environment, where the small fish risks being eaten by the big fish every second. We are talking, therefore, about resilience to stress. Often, however, especially when practicing Swing Trading, we also talk about resilience to temptations. Specifically, the temptation to act. Some traders (this attitude is much more widespread among the less experienced) find it very difficult to remain in waiting, and would like to enter when the conditions are "only" good and not optimal. Well, this temptation, certainly to a varying extent, involves everyone but only the best traders manage to resist it in a rather easy way.

Courage

Courage also plays an important role in trading. Obviously, it is not courage as understood by ordinary people, or by the collective imagination. It is a courage that has nothing to do, not even in part, with the concept of "recklessness". In Forex Trading, risk is always calculated, or at least it should be, so there is no room for reckless actions. Courage in Forex trading, a gift possessed by winning traders, is exactly the courage to do the right thing at the right time. It is not always easy, also because, as already specified, the pressure can reach levels that are difficult to sustain. Very often you are tempted to exit, for example, but if the evidence of the trading plan and technical analysis suggest action, you need to find within yourself the courage to act.

Rationality

That the trader, to be called expert and winning, must also be rational is an opinion shared even by ordinary people. Indeed, this is precisely the case, so nothing surprising. If anything, there is little clarity, at least on the part of laymen, about the ways in which this rationality is expressed. Well, for rationality in Forex Trading (but also in trading in general), we do not simply mean acting according to logic, but also an ability to "see clearly", to be able to pull the strings of a tangle that, when it comes to the market, is always very tangled. Rational people are able to focus on what is important, isolating the substance from the background noise. They have the ability to analyze but also to synthesize. Well, this also applies to trading.

Awareness

Specifically, awareness of the dark side of trading, the one little propagated by brokers. That is, defeat. The winning trader, even if it may seem a paradox, is so mainly because he knows defeat, he knows that it represents an always probable eventuality, even if he has now reached success. The truth is that all traders lose. Even those who... win (i.e. close the year in the positive). The sooner this awareness is gained, and loss is accepted as a natural fact, the sooner you will learn to react to failure. It is the first step to acquiring the strength necessary to get back up when you fall. A virtue to necessarily develop, as falls in Forex Trading are frequent and, for some, almost daily bread (especially in the early stages).

Humility

Humility, which does not mean lack of self-esteem, is a virtue always appreciated, in real life as in trading. It manifests itself in relationships with others, which in trading are often reduced to a minimum, but also in the relationship with oneself. Those who are humble are willing to learn, to put themselves on the line. One of the many situations in which humility proves to be a fundamental virtue is when the trading plan shows its fallacy. The proud tend to delay the awareness because they have linked the plan to their self-esteem: it would be like betraying themselves. The humble understand and accept their mistake and are willing, if necessary, to start from scratch. Humility is therefore a fundamental resource for being able to react to negative events, a sort of necessary condition for the exercise of flexibility, another gift we talked about previously.