Successful traders often have a lot of different things in common - but the right psychology is one of the most important things in this list. It’s no coincidence that those who make winning trades are often those who remain disciplined and calm when trading.
So - what traits do these traders usually have in common? Find out four common psychological traits shared by all successful traders below…
Patience is crucial to any trade. Rushing into trades as soon as you see the market move up or down is usually bound to result in losses. So - how can you practise this?
Make sure you wait for confirmation that the market is moving in a certain direction (by drawing support and resistance lines, or switching time frame from the daily to the weekly) before placing your trades. Sudden moves are usually motivated by fear or greed - definitely emotions to avoid on MT4!
Staying calm is very closely tied to staying patient. Stay relaxed when trading: panicking can often lead to losses, whether you’ve just made a winning trade or a losing one.
Made a winning trade? It’s crucial to stay calm in order to keep those profits - you might experience a winning-streak high and then rush into other trades. If you’ve made a loss, it’s also equally crucial to stay calm: panic might involve placing more trades quickly in the hope of making your money back - but you’re more likely to lose more this way.
Remember: sudden moves equal losing trades. Stay as calm and as rational as possible.
Trading famously takes discipline. When you began trading, you likely made a (mental or physical) trading plan that worked for you - so stick to it!
If you made plans to never lose more than 3% of your capital in a day, then stop if you find yourself making a series of losing trades taking you near this level. Stick to your trading plan and you’ll find the discipline helps you enormously.
Sometimes an important part of trading is accepting your losing trades. When you do make a loss, it’s important to use it as a valuable lesson. With a calm head, assess the situation to see how you could do better next time and learn from your mistakes.
Ask yourself: what could you have done differently? How should you restructure your trading plan? How can you prepare yourself for losses in the future? Should you change your trading plan? Accepting the loss will help you to improve your plan and strengthen your trading mindset for next time.
These are the four psychological traits shared by traders!
Want more tips? Visit our Trading Psychology blog. Alternatively, share your tips on our Facebook group with other BluFX traders!