Have you wondered how to succeed in trading and become successful in your trading? One of the most interesting areas of study developed in psychology is research on the concept of success. What makes certain people more successful than others? This is one of the central themes for dealing with traders’ psychology. This article will address the issue of how to become successful in your trading and give you a roadmap to achieve success.
Indeed, achieving success in trading seems to have a formula. In an interesting study, and after 500 interviews and a much elaborated theoretical effort, Richard St. John helped to clarify which ingredients are part of this formula. He emphasizes 7.
First of all, one of the most important ingredients is passion. Passion requires a clear awareness of what motivates us, what moves us when we do something. What’s the reason and the strongest motive driving us to become traders?
This source of inspiration must always be present and should be the basis on which our day to day life should run. In difficult times, it’s this passion we must resort to finding our way forward.
It is especially important to be passionate about trading because of the amount of effort you’ll have to put in if you want to succeed. Trading evolves spending a lot of time looking at the markets and testing strategies until you find the right one for you. In this sense, it’s crucial that you like what you’re doing, otherwise, it’ll be really difficult to spend all this time until results start appearing.
2. See it as a Job
Dedication and work seem to be another important ingredient in achieving success. Not just work, but hard and dedicated work. No results are achieved without a hard and dedicated effort.
There are professional traders who do this as a job. However, even for small traders, this activity is able to proportionate good profits if the strategy is the right one.
Trading may be considered a source of income like any other job, and so it’s important to see it as such. Even if it’s done as a part-time, real money is at stake. As such, the intensity of work should be same as put in a job, only proportional to the time spent in this part-time.
A 3rd element, closely associated with the former, is the necessity to practice. Nothing in life comes for free, and so it’s crucial to practice, practice and practice again, in order to achieve results. We are creatures of habit striving to achieve something. Without practice and routines, our brain does not assimilate information.
A lot of brokers and platforms offer the possibility of opening an account without a minimum deposit and only use demo accounts. This may be a good way to start practicing and testing strategies. It is impossible to learn how to trading by just reading about it. As such, the best option to gain insights and understand how markets work is really by being involved.
The 4th ingredient for success is focus. Our brain performs better if we are doing only one thing. Concentration on a specific idea or strategy is essential to achieve a better result in that particular task. When trading, traders should only focus on the markets. Poor attention may result in missing major market moves or entering in the wrong ones.
Nowadays it’s very common to hear about multitasking. In trading, this may not be advisable. It’s an activity that requires a lot of attention to be able to spot possible reversions of the trend, breakouts, etc. To succeed in trading, a lot of factors must be taken into consideration. The only way to be completely aware of what’s happening is through complete focus.
By effort is meant not so much dedication but endeavor. Success requires constant commitment and being able to fight “against everything and against all”. Spending hours and hours unceasingly pulling old boundaries to reach new ones. This sense of commitment and endeavor characterizes many of the personality traits that have been successful in the markets.
As already said, trading requires a lot of hours invested until results start appearing. As a result, a lot of traders give up at half way, because they don’t understand the level of commitment necessary for success. Only be working more and putting more effort into something, you’ll be better than the guy next door.
Having the capacity to persist and the effort to achieve results is another ingredient to success. Persistence is a concept that, above all, requires building barriers against negativity. Barriers against failure, criticism, pressure and rejection.
In trading, it will be at least as common to lose than it is to win. Traders must be able to overcome all their losses and learn from them. Only with this mindset should you be able to reach a level of profitability. We wrote about how to work out this mentality in our Trader’s Mentality article.
It’s important to fall and learn from that. Don’t quit and improve more at each step. It may take more or less persistence, but time will come when things start being the way you thought.
7. Family Support/Team Spirit
To conclude, success is also more easily achieved when we have a network of affections around us. Once again, through this network of affection and understanding, we are able to overcome adversities with greater ease.
Working in a team can also be helpful. Although it’s only needed one person to trade, having a team of traders discussing their views about the market is valuable. Support and teamwork help fighting against our own limitations.
What is successful trading? How to succeed in trading? These questions pop up in traders’ heads when they start trading. The answer is that we must start by understanding what the word success means and how we can achieve it. Studies in the field of psychology came to detect patterns common to all those who have succeeded. The 7 aspects presented above are the main ones if you wish to become a successful trader.