It's not easy to trade for a living, but it's even harder to do it with the right mindset and mentality. This mindset and mentality so often impact whether or not a trader will reach that all-important stage of becoming a funded trader.
So - what are the traits needed to become a funded trader?
What is a funded trader?
A funded trader is defined as follows:
- A funded trader is someone who has been tested and found profitable for a significant period.
- A funded trader is someone who gains trust to trade with capital that isn't their own after consistent results.
- A funded trader is someone with the key traits to be consistent over time with large amounts of money at stake using their methodology.
A funded trader will have a funded trading account - which means that the individual is trading with funds that aren't their own. That means a funded trading program grants them access to a trading account without the hassle of money/equity requirements or paperwork.
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Do you have these 10 traits needed to be a funded trader?
1. Emotional control
Trading is like no other business. If you're a reckless funded trader, there's always someone else who will be ready to take advantage of you. That's why you need emotional control. To trade in a targeted, profitable manner, it's essential to have complete emotional control at all times - from your first glance at the market to hit the sell button when you reach your target price and even after that.
2. Solid knowledge of the markets
The experience of the markets is as necessary as a sharp eye. You must be able to skim the charts and understand where exactly you are placing your money. Trading without the fundamentals is like flying blind, and you will likely crash and burn in the end. Trading is a numbers game. You need to be able to crunch those numbers and give them meaning.
3. Attitude and desire to succeed
Although a proper knowledge of the markets is a crucial component at the core of being a funded trader, there is something far more critical than just technical skills. The most important thing to consider when looking at becoming a funded trader is your attitude and desire. Without these two traits, it will be a long road to finding success in the forex market.
4. The ability to manage risk
Wall Street traders don't just trade for a living. They also must be exceptional managers of risk. To be a successful funded trader, you need to manage your broker's market and relationship with investors. For every trade that you execute, there should be an exit strategy in place that can eliminate your losses on the trade as well as limit your potential losses in extreme cases.
5. Discipline and patience
So how do you know if you are disciplined and patient enough? Well, first, ask yourself if you tend to take action too quickly at times. Second, ask yourself if you are scared of taking a loss on a trade. Third, ask yourself if you are good at holding onto profitable positions long enough to see them through to completion. The answer to all three of these questions is yes or no. If you have trouble answering even one question affirmatively, then you are most likely not experienced enough to be a funded trader.
6. Dedication to learning
The best traders have a dedication to learning – they read books, take courses, and attend seminars. The goal is to expose oneself to as much information as possible about trading and markets. Traders need to surround themselves with like-minded and successful people in the industry. During these periods, they can bounce ideas off each other, listen and learn from others that are already successful in the field, or even collaborate with others in the area for mutual gain.
7. Demonstrate a willingness to take losses
No one likes to lose money in trading. Yet, every funded trader must have the desire to take losses quickly and cut their losses short. However, sometimes you must take small losses and be content with small profits. When you're starting out, this is the key to success.
8. Having proper money management skills
Many traders don't have adequate money management skills, or they feel that the money management aspect of trading requires too much time. The fact is, you need to master them both if you want to be a successful trader. How much you can profit each trade is predetermined by the amount you risk per transaction based on your money management skills.
9. Be passionate about the challenge of trading
Most traders make money when they trade, but the game is won with how much you can make on the days you lose. By hustling and working hard, funded traders who have a passion for the profession tend to find success in their markets. By nature, trading is a competitive and thrilling pursuit.
10. Having a steady history of trading the markets successfully
It takes more than IQ to succeed as a funded trader. While you don't need a track record to be a great trader, many traders who lack financial history are often blinded by the market's volatility. They may be honest people but have no experience with terrible market conditions or how to deal with large financial losses.