When it comes to trading, it’s not just about finding the perfect strategy. Sure, that is a hugely important part of making trading a successful endeavour, but a strategy on its own doesn’t always equate to making money if you don’t have the correct mindset. Simply knowing how to trade shares isn’t the beginning and end to a success story, but finding the correct mindset can be the linchpin that keeps the trading ball rolling in the correct direction. Just what is this mindset? Well, it varies from person to person, but there are some traits that are handy to possess if you want to be as successful as possible in the trading world.
Patience and discipline
Patience is a virtue, as the saying goes. Indeed, it is, and it is a virtue that pays dividends within trading. Having a ‘jumpy’ nature does not suit day trading well at all. Waiting for the right deal is integral to being a success in this field, as is having the patience to wait and see if exiting from the market is the right thing to do at any given time. Your entry and exit points on any deal are key, and holding your nerve, maintaining discipline, and not jumping the gun at either point will serve you well as you survey the trading opportunities.
Resilience or mental toughness is an equally desirable trait for the budding day trader. There will be times when a deal goes wrong, or you don’t make quite as much profit as you had hoped. Being able to bounce back and learn from these mistakes or missed opportunities is part of what separates the best day traders from the rest. It is also important to take into account the size of your wins, and the size of your losses. You may not actually need to win more trades than you lose, depending on their size. If you win rarely, but win big, and lose regularly but in small chunks, then you may still be making a handsome profit. This way of trading takes some resilience though, and you have to be mentally tough enough to take those losses on the chin and place your confidence in the wins that will dwarf them.
There is no getting away from the fact that data is hugely powerful for the day trader. You should be looking at data trends and plotting your trading decisions accordingly, but equally, applying that knowledge and seeing all the possibilities of any future trends is also paramount. Get yourself a list of protocols that you will follow should a trade veer in any direction, and stick to those protocols. This way, you are not wasting time when in the middle of a trade, allowing yourself to flit between different strategies, and perhaps leading yourself down a trading dead-end. Have your strategy set out, focus on the trade, and stick to your initial plan. You don’t want to be making emotional decisions in the middle of a deal.
Never stop learning
No matter whether you’re learning how to trade shares or you’re been in the trading game for a while, you should never stop developing your skills. Follow the experts, read up about different strategies, and above all, keep an eye on the markets as much as possible. This even means when you are taking a break from trading (for example when the market simply does not suit your current strategy), you should still be looking at trends, and what others are doing within the industry. Knowledge is power, and you want to be as powerful as possible when placing your money down on a trade. Having a thirst for knowledge in the trading world is a necessity unless you plan on simply being lucky for your entire trading career.
So there you have it, some important traits that all day traders should look to garner if possible. You may not possess these traits now but looking to manifest them within your psyche will pay dividends in the long run. Sometimes it is a case of simply training yourself to exhibit new habits a little more each day, rather than trying to be perfect immediately. Take the time to improve your technique each day and reap the benefits as time goes on. Happy trading!