What exactly are the characteristics and traits for a day trader? I’ve discussed about the personality type you need to own to be a day trader a few times before, but I’ve never actually discussed that you can develop these personalities and apply them only to day trading, right?
What I mean is: you need to be patient to practice day trading, that’s a fact. However, you don’t need to be patient while dealing with your teenager son. At least not if you want.
In this article, we will discuss the traits you need to develop to become an excellent day trader.
Sure, you need a strategy. You need to practise it until you nail it. But to make tons of money in every market condition, make sure to work in the traits you’re not that good.
One of the most recurrent problems with new traders is that they are not patient. They get in and out of trades too soon and fail to profit (some even lose money!).
It takes a lot of patience to wait for a big entry in the market since new traders are eager to do it. It also takes a lot of patience to exit the market with the best profit at the right time. Sure, there is plenty of action in trading, but the moments you need to be patient top that.
In my trading mistakes article, I discussed how higher time frames between trades can upgrade the profits. In this case, trading in higher time frames prevents the trader from seeing everything as a signal to trade, interpreting junk as treasure.
Maybe the most essential trait of all, discipline is the master of the day trader. Imagine you have a boss at work that you love and respect, and every time you follow their lead, you get profit somehow – that boss is discipline.
This key feature allows you to differ the good trades from the bad ones. There are thousands of options for you to choose, and if you’re not disciplined, you’ll go crazy. It’s like going to the supermarket to buy something – when you know what to buy, you’ll spend less time and less money.
Having a trading strategy and following it is having discipline. Excellent trading opportunities can appear throughout the day, and you must get them. However, when there are no opportunities that match your plan, wait patiently for them.
3. Mental Toughness
When we fight with our partner, we may collapse and give up, or we can practice our mental toughness (a.k.a thick skin). In trading, choosing to be tough is always the best choice.
Yeah, we will lose a few trades. That is inevitable, after all, we’re dealing with human matters and not science. What will differ the strong trader from the weak is that, while the latter gives up, the strong one handles it with resilience, finds the problem, and tries to avoid it the next time.
You have to pay attention if your wins are more significant than your losses. If so, you are a winning trader. The thing is, some traders fall apart when they lose a trade, which affects the next ones (that can be winners).
This is why mental toughness is such an important trait for traders!
Independence is a skill to be developed with experience. Eventually, you’ll realise that not always everything people tell you to do is best for your goals and strategies.
Being an independent woman is fantastic, right? With trading is the same: you’ll discover what brings you profit and create your very own strategy based on that!
With that, I don’t mean you should stop getting help. You can always go back to the theory and to other people’s opinions for perspective – but you’ll do that by choice, knowing what’s best for you.
There is no point in going online and tracing precisely the same steps a famous trader did to win a trade. This typically fails because every trade is unique.
If you’re like me, you have probably tried to make a tutorial from a hair stylish on YouTube. Our hair may look similar to the one on the screen, but I’m sure it won’t look exactly the same.
The same with trading, hairs are not the same. Trades can be more or less volatile, may have a stronger (or weaker) trend or range. Your hair can be curly, and the one in the tutorial is straight – your hair can be black, and the other red, the humidity levels on the places are different, etc.
That’s where the adaptability ability enters. It must be practised every day. The day trader has to pay attention to the daily price action and adapt their strategy to it.
Our personality is unique, but we must adapt it when it comes to trading.
Trading is psychological. We don’t only need to be prepared financially and technically to do it, but also psychologically – or else, everything will fall apart in less than a week.
Which of these traits of the day trader personality do you already have? Which will be the most difficult to acquire?
Share with us in the comment section below!