As anyone who has ever traded for more than a few days knows, the forex market is not what many would call “user-friendly.” Some claim that its lack of regulation and poor liquidity make it like playing in the Wild West.
And indeed, there are no referees or coaches to keep you from breaking your opponent’s leg rather than scoring a goal; but it doesn’t have to be this way. The “old hands” at any trading institution carry with them an air of discipline and wisdom about them that automatically makes prospective traders want to learn from them as quickly as possible (if only to stay out of their way).
But those who succeed both on and off the screen don’t do so because they know all the trade tricks; they succeed because they are masters of themselves. Here are four psychological traits that every successful trader must possess.
They accept responsibility for their actions
There is a famous joke about an older man who falls off a roof and breaks his leg badly. When he gets to the hospital, the nurse comes in looking distraught. “Doctor!” she says, “I accidentally dropped the new guy on his head.” The doctor looks back at her with surprise and replies: “Well, don’t just stand there – go get some ice!”
Every trading institution has its share of unpleasant accidents each year due to poor choices made by traders working under stress. Still, these institutions also boast about how seriously their employees take their own mistakes. It’s one thing to avoid repeatedly making the same mistakes out of fear of being reprimanded, but learning from your past mistakes is quite another.
Successful traders are great at this for two reasons: first, they know that feelings of guilt can be paralyzing and prevent them from making necessary changes in the future; second, taking responsibility means believing you have control over your actions. You are not merely a victim of circumstance; you are an active participant – so act like it! “A trader who doesn’t acknowledge what he did wrong will do it again” (Jack D. Schwager)
They take care of their health
Perhaps surprisingly, those who work in the financial industry are very unlikely to suffer from stress-related illness. A recent study of 15 leading cities placed New York at number 12 for its low rate of heart attacks. What is this secret? It’s simple: Those with no regard for their physical or mental well-being do not live long enough to move into highly paid positions.
Their co-workers know that ills such as obesity and depression decrease productivity, so they avoid them like the plague. And it’s no coincidence that traders who exercise regularly make better choices than those who don’t – after all, getting your body moving releases feel-good hormones called endorphins which can help you maintain focus on even the most difficult days.
They are comfortable with delayed gratification
How many times have we heard this argument? Sometimes the delay related struggles of forex trading can seem like a never-ending loop. You study diligently so that you can trade better tomorrow than you do today.
Still, you notice how much success other traders seem to have on social media, so you head out for some quick trades, only to wake up unhappy once more because they weren’t as successful as everyone made them sound!
For the average trader, this cycle may take years or even decades before breaking. But those who succeed know that delayed gratification is just another word for making the most of your currency trades. Trading is about making the best choices possible at any given moment, but it takes wisdom to know which moments are worth waiting for.
They don’t live in the past
Psychologists would say that successful forex traders avoid this passive-aggressive behaviour because they are confident enough to assume responsibility for their actions – even if they aren’t perfect all the time. They also know that dwelling on mistakes can make you miss future opportunities, whereas learning from old ones can help you improve.